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Friday, October 16, 2009

Death watch in Spokane

The federal bank regulators have been closing banks on a weekly basis for quite some time, but now they're also more or less identifying future shutdowns in advance. Who will get the carcass of Sterling for Christmas? Will it be Umpqua Bank?

Comments (7)

"Jamie is always hanging around the hoop. You know Jamie's saying, 'Let's make friends with these guys before I eat them.'"


Has anyone noticed JPM's Jamie Dimon, still belching from his Sheila Bair-assisted consumption of the nation's largest thrift WaMu, camped out at this end of the court?

Or is he more interested in gorging on Wells Fargo (WFC)?

The Bank of Umpqua is in good shape. They raised capital through a stock offering and non-performing loans are 1.7% of assets, which is well below the 5.0% threshold when you would start being concerned. About 15% of Oregon banks are at 5% or higher according to the FDIC.

The FDIC can't shut any banks down because the DIF, or Depositor's Insurance Fund, is out of money. Without its own bailout from the Treasury, in the form of a line of credit, FDIC can't perform that function - protecting deposits.

Fun times. But, oh, right, the recession's over.

Don Smith, although the FDIC's Sheila Bair maintains a very distant relationship with transparency, it would appear from the latest bank seizure that the FDIC will not be impeded from acting as receiver:

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