10th failure in 2008, but this one was sold right away(unlike indymac)
Integrity Bank, based in Alpharetta, Georgia, was closed by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation was named receiver.
The bank had $1.1 billion in total assets and $974.0 million in total deposits as of June 30.
The Federal Deposit Insurance Corporation approved the assumption of Integrity Bank's deposits by Regions Bank, of Birmingham, Alabama.
All depositors of Integrity Bank, including those with deposits in excess of the FDIC's $100,000 insurance limit, will automatically become depositors of Regions Bank for the full amount of their deposits, the FDIC said in a statement.
Regions Bank will pay a portion of the failed bank's deposits and will purchase approximately $34.4 million of its assets. The FDIC will retain the remaining assets for later disposition. The FDIC estimated that the cost to its Deposit Insurance Fund will be between $250 million and $350 million.
This is a pattern of the FDIC -- to wait until Friday afternoon to quietly announce takeovers in order to generate the least amount of publicity, and probably limit runs on the bank. Look for more of these to continue in the upcoming months.
jensenjp said: All depositors of Integrity Bank, including those with deposits in excess of the FDIC's $100,000 insurance limit, will automatically become depositors of Regions Bank for the full amount of their deposits, the FDIC said in a statement. Why does the FDIC automatically reimburse all depositors? Doesn't that jeopardize the FDIC's own reserve fund? Wouldn't it make more financial sense to stick to the law and NOT immediately reimburse the depositors who are beyond the $100K limit? Why not wait a few months/years to see how things play out with Citi and other big banks?
swandown said: jensenjp said: All depositors of Integrity Bank, including those with deposits in excess of the FDIC's $100,000 insurance limit, will automatically become depositors of Regions Bank for the full amount of their deposits, the FDIC said in a statement. Why does the FDIC automatically reimburse all depositors? Doesn't that jeopardize the FDIC's own reserve fund? Wouldn't it make more financial sense to stick to the law and NOT immediately reimburse the depositors who are beyond the $100K limit? Why not wait a few months/years to see how things play out with Citi and other big banks?
Maybe they do it to prevent bank runs by going above and beyond what is promised?
swandown said: jensenjp said: All depositors of Integrity Bank, including those with deposits in excess of the FDIC's $100,000 insurance limit, will automatically become depositors of Regions Bank for the full amount of their deposits, the FDIC said in a statement. Why does the FDIC automatically reimburse all depositors? Doesn't that jeopardize the FDIC's own reserve fund? Wouldn't it make more financial sense to stick to the law and NOT immediately reimburse the depositors who are beyond the $100K limit? Why not wait a few months/years to see how things play out with Citi and other big banks?The FDIC in this case, sold the banks assets to another bank. They just stepped in at a time when the bank was still had enough assets to make their depositors whole.
theman2 said: swandown said: jensenjp said: All depositors of Integrity Bank, including those with deposits in excess of the FDIC's $100,000 insurance limit, will automatically become depositors of Regions Bank for the full amount of their deposits, the FDIC said in a statement. Why does the FDIC automatically reimburse all depositors? Doesn't that jeopardize the FDIC's own reserve fund? Wouldn't it make more financial sense to stick to the law and NOT immediately reimburse the depositors who are beyond the $100K limit? Why not wait a few months/years to see how things play out with Citi and other big banks?The FDIC in this case, sold the banks assets to another bank. They just stepped in at a time when the bank was still had enough assets to make their depositors whole.
It could be that the FDIC was insuring some accounts that were under the $100k limit and Regions Bank paid out for those above $100k? It's a stretch (and a bit shady) but possible...
wangarific said: theman2 said: swandown said: jensenjp said: All depositors of Integrity Bank, including those with deposits in excess of the FDIC's $100,000 insurance limit, will automatically become depositors of Regions Bank for the full amount of their deposits, the FDIC said in a statement. Why does the FDIC automatically reimburse all depositors? Doesn't that jeopardize the FDIC's own reserve fund? Wouldn't it make more financial sense to stick to the law and NOT immediately reimburse the depositors who are beyond the $100K limit? Why not wait a few months/years to see how things play out with Citi and other big banks?The FDIC in this case, sold the banks assets to another bank. They just stepped in at a time when the bank was still had enough assets to make their depositors whole.
It could be that the FDIC was insuring some accounts that were under the $100k limit and Regions Bank paid out for those above $100k? It's a stretch (and a bit shady) but possible... My guess is that the FDIC is taking some of the bad debt off the books ("for later disposition") making it attractive enough for Regions to cover the remaining uninsured deposits in their purchase.
There's still a cost to the insurance fund if the assets that the FDIC took don't work out(I think that they already stuck a number out there for this failure), but it's likely to be cheaper than liquidating the bank and eating the entire loss.
sweetbutter said: Why did it fail? Several small banks in the Southeast have made loans to small time home builders, this seems to be one of those cases.
there was one of these literally right around the corner from my house. A couple of months ago, I saw a list of the 10 banks nationwide considered most likely to fail based on their 'Texas ratios.' Integrity was #1. Around the same time, they started offering a fairly high-interest checking account. You had to use the debit card 12 times per cycle, though. They also offered a higher rate on CDs than anyone else in metro ATL by a fair amount. It all smacked of desperation to raise capital.
Now this. And the Atlanta Journal-Constitution reports they are being investigated by the FBI for at least one loan of $83M to a single developer in south Florida. Apparently the loan was very large for a bank this size. Looks like they may have gotten caught in the Miami crash. Another article mentioned the CD rates they were offering, and some banking experts said banks offering rates much higher than everyone else should at the minimum trigger a red flag that they may be desperately seeking cash.
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