Now AmTrust lowered their E-Money Market Account rates. Down to 3.5%APY.

Good thing I only have like $1 in this account.

looks like you will be looking for a new bank after Dec 11. They sent me an email the other day telling me I could close my CD early with no penalty and they will even wire the money out at no cost. Nope, Still have 4 months of 4.35%. But will they last 4 more months?

AmTrust's response to regulatory order includes job cuts
Bank reacts to order to improve finances
Wednesday, November 26, 2008
Teresa Dixon Murray
Plain Dealer Reporter
AmTrust Bank said Tuesday it will cut an undisclosed number of jobs as it tries to cope with a regulatory order to improve its finances.

AmTrust, the Cleveland area's fourth-largest bank, also has been ordered to stop soliciting deposits by offering high interest rates.

Meanwhile, the bank is trying to raise money through outside investors, spokeswoman Donna Winfield said in a written statement.

If AmTrust doesn't comply with the formal order from the Office of Thrift Supervision, regulators could take steps such as changing the management or seizing the 119-year-old bank.

AmTrust hasn't completed plans for the job cuts and affected employees have not yet been notified, Winfield's statement said.

Word of more layoffs at the bank - which employs 2,700 in three states, including about 1,800 in Ohio - comes a day after revelations that AmTrust has been ordered to increase its reserves and to stop writing certain kinds of riskier mortgage loans, including those with no documentation required. Most banks nationwide stopped doing risky loans six to 12 months ago or more. AmTrust is one of the nation's 15 largest mortgage lenders.

AmTrust's government regulator said the bank "has engaged in unsafe and unsound banking practices," based on an exam in August.

"We take the OTS's order seriously and are working our way towards fulfilling their requirements," Winfield's statement said.

She stressed that customers' deposits are insured by the Federal Deposit Insurance Corp. up to the new, higher limits, which start at $250,000 per account holder. She added that the bank is continuing to write various consumer and residential loans, although the OTS has ordered AmTrust to stop writing any loans for land acquisition, development or speculative residential construction.

The bank also has been ordered to develop an acceptable business plan by Sunday.

"We are working to implement a sound going-forward business plan to strengthen the bank's capital ratios and increase our earnings potential," Winfield's statement said. "This plan includes efforts to raise additional capital from external sources as well as conserve capital by carefully managing our business, which unfortunately will include some reductions-in-force."

Winfield didn't respond to a question about whether AmTrust has applied for money from the U.S. Treasury's Troubled Asset Relief Program.

An OTS spokeswoman declined to comment about the order, except to say that the agency makes formal actions public because they're more serious than informal actions.

AmTrust as of June 30 had a Tier 1 capital ratio of 11.5 percent - nearly twice the minimum required. By late August, that apparently had dipped to below 7 percent. AmTrust has been given until Dec. 31 to maintain a ratio of at least 7 percent. As of Sept. 30, it was 9.3 percent.

A steep decline like that means the bank burned through money quickly - either because of significant loan losses or because regulators believe AmTrust's assets are worth a lot less than the bank said they were worth, said Kevin Jacques, a former bank regulator at the U.S. Treasury and now an associate professor of finance at Baldwin-Wallace College in Berea.

AmTrust, which was known as Ohio Savings until last year, ranks No. 4 in Greater Cleveland in deposit market share. It has about $4.5 billion, or 7 percent, of local deposits. It ranks behind National City, KeyCorp and Third Federal Savings. AmTrust also has branches in Florida and Arizona.

The bank is restricted from attracting new deposits by offering interest rates that are more than 0.75 percentage point above the prevailing local rates.

Jacques, who worked for the Treasury for 14 years and whose work included finding buyers for troubled banks, said AmTrust was probably trying to gamble its way to more profits. By trying to attract deposits and then making new risky loans at higher-than-normal interest rates, "what you're trying to do is grow your way out of your problems," Jacques said. "But you're actually taking more risk."

AmTrust is also restricted from paying golden parachutes or entering into new compensation contracts with any executive or board member without OTS approval.

"We operate in unprecedented times," Winfield said in her statement. "But this bank has weathered many storms during its proud 119-year history as a leading community bank. We are dedicated to managing through this current crisis as well."

To reach this Plain Dealer reporter:

tmurray@plaind.com, 216-999-6315

Fucders won't let me log on - they are giving me security questions I never previously provided. I hate that.

That makes no sense. There is no reason to have that much money in their accounts, is there? I did not think the rate was that competitive.

Ah, I get it now....sorry. Yes it is insured up to $250k whether or not the Feds take it over. But I do think it would be more stable with the Feds in temp control.

Had AmTrust not been insured and ultimately taken over by the Feds you would have lost all your money.