Monday Morning Cup of Coffee
A look at the stories on HousingWire’s weekend desk…with more coverage to come on bigger issues:
Regulators shut down six banks Friday, bringing to total number of failed institutions to 130 this year. The total estimated cost to the Federal Deposit Insurance Corp.’s (FDIC) deposit insurance fund is $2.384bn.
The Office of Thrift Supervision (OTS) closed Cleveland, Ohio-based AmTrust Bank. The FDIC, as receiver, entered into a purchase and assumption agreement with Westbury, New York-based New York Community Bank, which reopened the 66 AmTrust branches as New York Community Bank locations. New York Community Bank did not pay a premium to assume all $8bn of AmTrust’s deposits, and purchased $9bn of the failed bank’s $12bn in assets. The failure is estimated to cost the FDIC fund $2bn.
The Illinois Department of Financial and Professional Regulation closed Aurora-based Benchmark Bank and the FDIC entered into a purchase and assumption agreement with Chicago-based MB Financial Bank, National Association, which did not pay a premium to assume all of the failed bank’s $181.0m in deposits and $170.0m in assets. Benchmark had five branches that reopened as MB Financial Bank locations. The cost to the FDIC fund will be $64m.
The OTS also closed Reston, Virginia-based Greater Atlantic Bank. McLean, Virginia-based Sonabank assumed all the failed bank’s $179m in deposits and “essentially all” the bank’s $203m in assets at no premium. Greater Atlantic Bank had five branches, which reopened as Sonabank locations. The estimated cost to the FDIC fund is $35m.
Three Georgia banks failed on Friday. The Georgia Department of Banking and Finance closed Atlanta-based Buckhead Community Bank. Macon, Ga.-based State Bank and Trust assumed all the failed bank’s $874m in deposits and “essentially all” of its $838m in assets at no premium. Buckhead’s six branches each operated under a different name — Sandy Springs Community Bank, Midtown Community Bank, Alpharetta Community Bank, Cobb Community Bank, Forsyth Community Bank, and Hall Community Bank — which will all open as State Bank and Trust branches. The failure will cost the FDIC fund approximately $241.4m.
The Office of the Comptroller of the Currency (OCC) closed First Security National Bank. State Bank and Trust assumed all of the bank’s $123m in deposits and $118m of its $128m in assets at no premium. The bank had four branches, which reopened as State Bank and Trust locations. The failure will cost the FDIC fund $30.1m.
The Georgia Department of Banking and Finance closed Reidsville, Georgia-based Tattnall Bank. Albany, Georgia-based HeritageBank of the South assumed all the failed bank’s $47.3m in deposits and $48.5m of $49.6m of its assets and reopened the bank’s two branches as HeritageBank of the South locations. The failure will cost the FDIC fund $13.9m.
After a relatively calm week in commercial mortgage-backed securitization (CMBS) activity last week, reports of improved unemployment and other economic data ignited a rally in the sector Friday, Barclays Capital analysts wrote in its weekly securitization report.
Employment reports are one source of guidance for office space demand, and should employment trends continue to improve, Barclays wrote, demand for office space should rebound in 2010.
“In light of better economic data and recent underperformance versus other fixed income sectors, we move to an overweight position on the CMBS basis with a preference for recent vintage last cash flow bonds originally rated AAA,” Aaron Bryson and Tee Yong Chew wrote. “Recent economic data and improved capital market conditions cause us to lower the probability of our stress case scenario, where recent vintage dupers take meaningful losses.”
Barclays said the new face of the asset-backed securitization market, a sector with considerably more conservative terms it dubs “CMBS 2.0,” continues to grow. Deals last week included a $500m CMBS offering from Inland Western Realty, a non-publicly traded real estate investment trust (REIT) that specializes in the retail sector.
The Treasury Department will wait to sell its 7.7bn shares of Citigroup ($50.52 -0.01%) stock until federal regulators and the financial institution finalize a plan for the bank to repay all of its $45bn debt to the government, according to multiple media reports.
Treasury officials are said to want to hold on to the shares until it’s determined whether Citigroup will need to raise additional capital to pay off its Troubled Asset Relief Program (TARP) debt. Selling the shares before that could weaken investor demand. For three months, Citigroup has worked to convince the Treasury to sell its stake in the firm.
Bank of America ($13.24 0.03%), JP Morgan Chase ($53.66 0.31%), Goldman Sachs ($158.72 1.31%) and Morgan Stanley ($24.35 0.1%) have either repaid their TARP funds or are in plans to repay and exit the program.
In other debt repayment news, Sultan bin Saeed al-Mansouri, economy minister of the United Arab Emirates (UAE), critical of media reports on the financial stability of Dubai World, said it was only “a matter of time” until the Dubai-owned investment firm repays its $60bn in debt.
“Dubai World's debts do not affect the economic performance of Dubai or the UAE and it is a matter of time before the company restructures its debts and honors its commitments as per a scheduled plan,” he told the British newspaper The Guardian.
Dubai World began the process of restructuring $26bn of its debt, and after taking a plunge when Dubai’s troubles were first announced, financial markets are recovering.
Henry Miller Jr., the Dallas businessman responsible for making his father’s small insurance and real estate business into one of the country’s largest independent brokerage and property management firms, passed away Sunday after a brief illness. He was 95.
It was under Miller Jr.’s leadership that Henry S. Miller Co. was divided into three divisions — office, retail and investment properties — providing specialized service to its clients. The company was responsible for developing a number of shopping centers throughout the Dallas area. Under Miller Jr.’s leadership, the firm led the revitalization of the nation’s first shopping center, Highland Park Village, in Highland Park, a suburban city of Dallas.
NFL great Roger Staubach worked for Miller Jr. at the firm during off seasons when he played for the Dallas Cowboys. Staubach, who now runs his own commercial real estate firm, credits Miller Jr. for developing his business acumen.
“I was very fortunate to have a great mentor on the playing field, [former Cowboys coach] Tom Landry,” Staubach told The Dallas Morning News. “And Mr. Miller was my mentor in business.”
Write to Austin Kilgore.
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