IndyMac

IndyMac Bank

Dan Bowman — Mon, 29 Sep 2008 15:26:04 -0400

Who: IndyMac Bank

What: Fifth bank failure of 2008 (July 11, 2008)

Where: Pasadena, California

Why: Losses on defaulted mortgages made at the height of the housing boom.

Fast Facts: At the time of closing, IndyMac was the second largest bank failure in U.S. history (currently stands as the third largest after the failure of Washington Mutual); the FDIC was named conservator and transferred insured deposits and all assets of IndyMac Bank to IndyMac Federal Bank; at the time of closing, IndyMac had about $1 billion of potentially uninsured deposits with approximately 10,000 depositors; as of March 31, 2008, IndyMac had $32.01 billion in total assets and $19.06 billion in total deposits; the takeover of IndyMac is costing the FDIC between $4 billion and $8 billion.

View the press release

Related Article:
Does IndyMac presage a slew of failures?

The U.S. Banking Collapse

Dan Bowman — Mon, 29 Sep 2008 15:10:30 -0400

From 2003 to 2007, there were 10 bank failures in the U.S. Already in 2008, 19 banks have failed, with the lowlight being the collapse of Washington Mutual on September 25--the biggest bank failure in American history. What other banks have failed this year? Read on to find out.

Virtual receivorship for Wachovia?

Jim Kim — Tue, 22 Jul 2008 13:25:56 -0400

MarketWatch says this about Wachovia: "A case could be made that Charlotte, N.C.-based Wachovia, where loan defaults have jumped nearly five fold, isn't much better off than the failed lender." The failed lender being referred to is IndyMac. The column wonders whether the government had grounds to step in and bail out the bank. Well, it doesn't look like the Wachovia is in that much trouble, but going forward, it doesn't seem to have a reliable source of capital now that its dividend is all but gone. It's unclear what assets it can sell, though it has retained Goldman Sachs to look for value. All in all, the idea that Wachovia--the fourth largest U.S. bank--could fail isn't entirely out of the question, but it still seems remote as of now. However, things may get worse soon. Maybe that's why they the board hired a regulator.

For more:
- here's the MarketWatch column

Richard Bove sued for defamation

Jim Kim — Tue, 22 Jul 2008 07:35:33 -0400

Not too long ago, Ladenburg Thalmann bank analyst Richard Bove made headlines when he put out a list of the banks most likely to fail. There was a day when analyst research was basically limited to clients. These days, however, people pretty much expect it to be posted on the web. Sure enough, someone gave the report to Dealbreaker. BankAtlantic, No. 10 on Bove's list, was not too happy. It sued him for defamation, reports the New York Times. The bank's view, of course, is that such commentary, especially when given a public airing, is irresponsible in that it could prompt a run on a bank that would make the bearish view almost self-fulfilling. Recall Sen. Charles Schumer's public comments about IndyMac. This may be a hard case legally for the bank, but it has made its point. Now, if it were to fail, that would complicate matters.

For more:
- here's the New York Times article

Does IndyMac presage a slew of failures?

Jim Kim — Sun, 13 Jul 2008 08:27:32 -0400

We've been suggesting that a string of bank failures may be around the corner. The federal takeover of Pasadena-based IndyMac--the second largest bank failure ever--serves as a timely reminder. After devastating Wall Street, the credit crunch is starting to hit Main Street in a big way. IndyMac was felled by a massive run: customers were pulling out $100 million a day, the LA Times notes. The stock had fallen to about $1. This could easily happen to other struggling regional-type banks. Rumors can really kill, as we all know, especially when stoked by powerful politicians. Sen. Charles E. Schumer (D-NY) told regulators last month that IndyMac was in trouble. IndyMac's forte was Alt-A loans, not subprime loans. In some ways, its demise is even more ominous.

For more:
- here's the LA Times article
- IndyMac rejected a deal that could have saved it. Article