Three More Examples Of How Bad The Bank Bailout Plan Worked
Just to show more evidence of how the bailout plan didn’t work and how it just added more money to the federal deficit, banks in Indiana, Virginia, and South Carolina have closed there doors.
Integra Banks in Indiana had its doors closed on Friday by federal regulators. Integra is the first bank in Indiana to fail this year and it is the first FDIC-insured bank to fail in Indiana since 2009, when Irwin Union Bank and Trust Company, of Columbus, was taken into receivership.
Carol Rice came to her Integra Bank on Sunday only to find that she’s now a customer of Old National Bank.
“No concerns,” said Rice after she stopped at her ATM on Sunday morning. “I just trust them. I don’t know why but I do.”
I wouldn’t trust them because you never know what they may do with your old accounts at your old bank. What if Old National fails? That’s another bank failure, and another example of the stimulus failure.
Integra Bank received $83.6 million in taxpayer funds in February 2009 under the government’s bailout program, Treasury Department data shows. The data also shows that those funds haven’t been repaid.
What a surprise! That money hasn’t been repaid to the government. The government expected that all of the bailout money would be repaid back to the government and the banks would be bailed out.
Well, that isn’t the case, as 61 banks have now closed its doors this year alone, with hundreds more closing in the past two years. That shows that the bailout plan failed, the government was wrong in its thinking, and money was wasted.
According to a statement from the Federal Deposit Insurance Corporation (FDIC), it reached a purchase and assumption agreement with Old National Bank, a part of Old National Bancorp. The agreement states that Old National will pay the FDIC a 1 percent premium that allows them to take all $2.2 billion in assets and $1.9 billion in deposits. The FDIC and Old National Bank will share Integra’s losses.
Integra Bank’s 52 branches, spread across Southern Indiana, Southern Illinois and Western Kentucky, were scheduled to reopen during their normal hours as Old National Bank branches to Integra’s locations.
Integra was lucky Old National was there to fall back on and purchase it. The FDIC was able to get Old National, another bank in Intregra’s area (both are based in Evansville), to purchase it and assume all of its assets.
The FDIC estimates that this (Integra’s failure) will cost the Deposit Insurance Fund $170.7 million. Compared to other possible alternatives, the statement said that the acquistion was the least costly resolution.
Integra Banks is the third largest bank to fail this year, behind the First Community Bank of New Mexico, and Superior Bank of Alabama.
BankMeridean NA of Columbia, South Carolina, and Virginia Business Bank of Richmond, Virginia also failed and had there doors closed Friday by federall regulators.
BankMeridian had about $239.8 million in assets and $215.5 million in deposits with three branches as of March 31 of this year. SCBT Financial Corp.’s banking subsidiary, SCBT NA of Orangeburg, S.C., agreed to a purchase and assumption deal with the FDIC to take over BankMeridian. SCBT entered into a loss-share transaction on $179 million on BankMeridian’s assets and agreed to take all of its deposits. BankMeridean is the third bank in South Carolina to fail this year.
The one branch of Virginia Business Bank had about $95.8 million in assets and $85 million in deposits. Xenith Bank, also based in Richmond, took all of the deposits and agreed to buy all of its assets. The cost to the FDIC would be $17.3 million.
The FDIC estimated that the cost of the three failures to the Deposit Insurance Fund will be $253.4 million.
Those three banks were lucky to have three other banks to purchase them. The FDIC was a good negotiator in this process, and got in on the deals, but, I don’t really know why there is a need for the federal government to intervene in deals like these. These should be private deals to take over another bank, not the federal government purchasing the bank and be the mediator in everything.
(Credit to the Wall Street Journal, WISH TV 8, TheStreet.com, and the Princeton Daily Clarion for the info)