For Immediate Release
Chicago, IL – November 3, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: U.S. Bancorp (USB), JP Morgan Chase (JPM), Fifth Third Bancorp (FITB), Zions Bancorp (ZION) and SunTrust Banks (STI).
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Here are highlights from Monday’s AnalystBlog:
Bank Failures Zoom to 115
The nine banks had 153 offices, out of which California National Bank had 68 branches. California National Bank was the biggest of FBOP’s banks, the nation’s 101st largest with assets of $7.1 billion.
Failure of these institutions represents another impact on the Federal Deposit Insurance Corporation’s (FDIC) fund for protecting customer accounts, as it has been appointed receiver for these banks. The failure of 115 banks has cost the federal deposit insurance fund more than $25 billion so far this year. The FDIC insures deposits at 8,195 institutions with roughly $13.5 trillion in assets.
When a bank fails, it reimburses customers for deposits of up to $250,000 per account. The outbreak of financial institutions failing has significantly stretched the regulator’s deposit insurance fund. As on June 30, 2009, the fund corpus fell to $10.4 billion, the lowest since 1993, from $13.0 billion in the prior quarter.
Minneapolis-based U.S. Bank, a division of U.S. Bancorp (USB), has agreed to assume the deposits and most of the assets of these nine banks. The FDIC and U.S. Bank agreed to share losses on about $14.4 billion of the combined purchased assets.
In the second quarter of 2009, the number of banks on the FDIC’s list of problem institutions grew to 416 from 305 in the first quarter. This is the highest since the savings and loan crisis in 1994.
Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates the bank failures to cost about $100 billion over the next four years.
In order to replenish the declining fund, the FDIC board recently proposed that the U.S. banks should pay fees for three years in advance. Also, the regulators are considering requesting the healthy banks to bail out the government soon as it is necessary to replenish the deposit insurance fund, which has slipped to 0.22% of insured deposits, below the mandated minimum of 1.15%.
The failure of Washington Mutual last year was the largest in U.S. history. It was acquired by JP Morgan Chase (JPM). The other major acquirers of failed institutions since 2008 include Fifth Third Bancorp (FITB), U.S. Bancorp, Zions Bancorp (ZION), SunTrust Banks (STI), among others.
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