National City bank worried about failing

[southsider2k5]

I have an account there, and we are moving our money out. Call me Chuck Schumer. They have been trying to raise capital, but I am not convinced.

 

http://ap.google.com/article/ALeqM5gKqc2HQ...9TYdbAD91TSE580

 

National City plunges amid broad bank fears

 

By JOE MILICIA – Jul 14, 2008

 

CLEVELAND (AP) — Shares of National City Corp. plunged Monday amid broad fears about the health of the nation's regional banks, and the company was forced to issue a statement reassuring investors of its soundness.

 

The Cleveland-based regional bank said it has experienced no unusual depositor or creditor activity and has more than $12 billion in excess short-term liquidity.

 

Investors have been worried about the solvency of some banks amid the sharp downturn in the mortgage market. Late Friday the government seized IndyMac Bancorp, marking the second-largest failure of a financial institution in U.S. history.

 

National City has been among those hit hardest by rising mortgage defaults. It recently raised $7 billion in cash to shore up its capital base. The bank said the recent cash infusion has helped it to maintain a strong capital ratio.

 

Shares of National City tumbled 65 cents or 14.7 percent to $3.77 late Monday. They had reached as low as $2.99 during the day, their lowest level in decades.

 

The New York Stock Exchange halted trading of National City's shares at 11:52 a.m. because of the bank's pending announcement. Shares resumed trading at 12:10 p.m.

 

National City spokeswoman Kristen Baird Adams said the statement was meant to quash speculation that "indicated that there was perhaps some kind of unusual activity at National City today."

 

The statement "just reiterated a couple of messages about our capital ratios which are important," she said.

 

National City, which operates largely in the Midwest, was among many bank stocks to tumble three days after the government stepped in to save failing IndyMac Bancorp.

 

The Office of Thrift Supervision transferred control of IndyMac to the Federal Deposit Insurance Corp. because it did not think the lender could meet its depositors' demands.

 

IndyMac, which had $19 billion in total deposits as of March 31, is the largest regulated thrift to fail and the second-largest financial institution to close in U.S. history, regulators said.

 

Wall Street also has been concerned about the health of Fannie Mae and Freddie Mac because of losses in their mortgage portfolios.

 

Lana Chan, senior bank analyst for BMO Capital Markets, knew of no specific rumors regarding National City that would cause the stock to plunge.

 

"It's fears following the failure of IndyMac, the state of Fannie and Freddie and just general concerns that the losses on housing related credits are increasing," Chan said. "We're definitely seeing in the second quarter that the losses on the housing side are rising rather rapidly."

 

She said it was important for National City to reconfirm that they have excess short-term liquidity and strong capital ratios.

 

"I think with the capital infusion that they recently got, that should be enough to absorb their potential losses," Chan said.

 

At a National City branch on the ground floor of its Cleveland headquarters, customers went about routine transactions Monday.

 

Christie Cermak, 51, a downtown office worker, came to the branch to deposit her government stimulus check. She said she is somewhat aware of the bank's problems.

 

"I think about it and I am a little worried about it," Cermak said. "I'm hoping they pull through."

 

National City, the nation's 10th largest bank, reported a loss of $333 million in the fourth quarter. It slashed its dividend and reported a $171 million loss in the first quarter.

 

It was heavily exposed to mortgage and housing woes, but it has cut jobs and moved away from broker-originated subprime lending. On Jan. 2, National City disclosed it was shutting down its wholesale mortgage division and eliminating 900 jobs due to weakened housing and credit markets.

 

National City operates about 1,400 bank branches spread mostly across Ohio, Florida, Illinois, Indiana, Kentucky, Michigan, Missouri and Pennsylvania.

 

Associated Press Writer M.R. Kropko contributed to this report.

On the Net:

 

* http://www.nationalcity.com

 

Hosted by Google

Copyright © 2008 The Associated Press. All rights reserved.

[StrangeSox]

My girlfriend and I both have our main accounts there (not a ton of money, we're both in our early 20's). What's the procedure if a bank does go under? How long does it take to get the FDIC money?

[southsider2k5]

My girlfriend and I both have our main accounts there (not a ton of money, we're both in our early 20's). What's the procedure if a bank does go under? How long does it take to get the FDIC money?

 

That is my biggest fear. I really don't want to go through all of the red-tape and having my money tied up.

[Rex Kickass]

It is my understanding that when the FDIC takes over a bank, it closes for a couple days and reopens under a new bank name. Your money is safe and guaranteed - especially if the amount invested is less than 100,000 dollars.

 

Even the people at IndyMac had ATM access while the bank closed.

[StrangeSox]

That is my biggest fear. I really don't want to go through all of the red-tape and having my money tied up.

 

I've got money stashed away elsewhere, but it'd really put my gf in a bind to make her car/ student loan/ mortgage payments if her money were unavailable for several weeks.

 

Do you have a good source for banks that aren't being bent over by the subprime crisis? I'd hate to open another account and have that bank be on shaky ground a month later.

[southsider2k5]

I've got money stashed away elsewhere, but it'd really put my gf in a bind to make her car/ student loan/ mortgage payments if her money were unavailable for several weeks.

 

Do you have a good source for banks that aren't being bent over by the subprime crisis? I'd hate to open another account and have that bank be on shaky ground a month later.

 

I am moving to a local bank or local credit union. They sell off most of their loans anyway.

[shipps]

How dare you post this kinda propaganda at this site.You should be banned for this kinda behavior.Iam going to alert the admin's and mods.

[StrangeSox]

It is my understanding that when the FDIC takes over a bank, it closes for a couple days and reopens under a new bank name. Your money is safe and guaranteed - especially if the amount invested is less than 100,000 dollars.

 

Even the people at IndyMac had ATM access while the bank closed.

 

Found this on the FDIC's website regarding another bank closing:

http://www.fdic.gov/bank/individual/failed/NetBank.html

 

Looks like the money isn't really tied up for long, if at all.

[Rex Kickass]

Found this on the FDIC's website regarding another bank closing:

http://www.fdic.gov/bank/individual/failed/NetBank.html

 

Looks like the money isn't really tied up for long, if at all.

 

Yeah, I believe within three days, NetBank customers had all their stuff transferred to ING Direct.

[Balta1701]

Found this on the FDIC's website regarding another bank closing:

http://www.fdic.gov/bank/individual/failed/NetBank.html

 

Looks like the money isn't really tied up for long, if at all.

Part of the issue with Indymac bank out here was that there was a gigantic rush of customers right when the FDIC grabbed it, so that took a couple days, and then the other banks were especially careful with the checks labeled as coming from the FDIC run version of IndyMac, taking 2 weeks or more to process them, under the auspices of preventing fraudulent checks from appearing. At least with that case there was roughly 2-3 weeks where people seemed to have no idea when and where their money was at.

[Rex Kickass]

Two other banks failed over the last weekend, First National Bank of Nevada among them. By Monday, they were Mutual of Omaha and there were no real issues.

[Jim Spencer]

I live in a small town and National City is the only bank in town. I have a savings account there, but I glad my checking account is with a Credit Union.

 

Isn't a certain Cubbie God their spokesman

[Jimbo's Drinker]

boy makes the unemployed feel really good in this economic mess..im f***ed

[Texsox]

How dare you post this kinda propaganda at this site.You should be banned for this kinda behavior.Iam going to alert the admin's and mods.

His warning level was already adjusted -10%, but then we added back in +20% for getting banned at WSI for something so silly as to not be believed.

[Chisoxfn]

Anyone know how this works for big businesses which have corporate accounts with these banks. Say for example you are Microsoft and have 20 million in cash sitting with Indy Mac or National City. Are there accounts insured at higher balances or do these companies now have to face significant write-downs or even at least create allowances against these accounts?

[kapkomet]

Anyone know how this works for big businesses which have corporate accounts with these banks. Say for example you are Microsoft and have 20 million in cash sitting with Indy Mac or National City. Are there accounts insured at higher balances or do these companies now have to face significant write-downs or even at least create allowances against these accounts?

As a rule, you don't have companies keeping that much cash in a bank, they have the money working for them. And if they do have that much cash, it's usually tied to a line of credit that's underwrited by A/R or some other collateral - so I would think that they would just simply lose access to that short term cash.

 

 

[Steve9347]

Should I be concerned if I have my mortgage through them? I presume it'd just be "sold off" to whatever new bank arrises...

Edited July 30, 2008 by Steve9347

[BigSqwert]

Should I be concerned if I have my mortgage through them?

No. If they go under you no longer have to pay your mortgage.

[kapkomet]

No. If they go under you no longer have to pay your mortgage.

 

(disclaimer) The above should not be construed as real financial advice.

 

We need to protect BigSqwert from getting sued.

[Steve9347]

No. If they go under you no longer have to pay your mortgage.

Ha, that'd sure be nice... lol.

[Balta1701]

Should I be concerned if I have my mortgage through them? I presume it'd just be "sold off" to whatever new bank arrises...

More than likely, I'd imagine it was already sold off to someone else anyway.

[Chisoxfn]

As a rule, you don't have companies keeping that much cash in a bank, they have the money working for them. And if they do have that much cash, it's usually tied to a line of credit that's underwrited by A/R or some other collateral - so I would think that they would just simply lose access to that short term cash.

I agree that most instances have any short term cash sitting in something that is making additional money, but often times that will be a money-market account and don't those fall under the same risks that a typical savings/checking account would have (and the standard FDIC $100K).

 

 

[kapkomet]

I agree that most instances have any short term cash sitting in something that is making additional money, but often times that will be a money-market account and don't those fall under the same risks that a typical savings/checking account would have (and the standard FDIC $100K).

Right. I would think that they would take a loss if the bank completely failed (which is almost certain to not happen).

 

[Texsox]

Right. I would think that they would take a loss if the bank completely failed (which is almost certain to not happen).

 

Isn't it time to increase the FDIC levels? Hasn't it been $100,000 for about fifty years?

[StrangeSox]

Isn't it time to increase the FDIC levels? Hasn't it been $100,000 for about fifty years?

 

That money has to come from somewhere when a bank fails (taxpayers).

 

Also, don't keep more than $100k in a single bank account. If you really want that much cash just sitting there, open up a second account.