Least likely bank to fail?

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muzie_IHB

muzie_IHB

New member
Hello,



My bank account is at Washington Mutual, which from my readings is one of the banks more likely to fail. I understand the accounts are FDIC-insured, but in the unlikely event that more banks fail than the FDIC could possibly insure I figured I may as well switch to a "safer", better capitalized bank.



Haven't found it yet though :-P.



Anyone have any suggestions for a well-capitalized bank that has a good presence in Irvine?
 
Not in Irvine, but <a href="http://k2.secure-banking.com/1285b.cfm?ID=1285b&PAGEID=0709130102749040&FRAME=0">Farmers & Merchants </a>is considered to be among the best.
 
[quote author="muzie" date=1216122412]Hello,



My bank account is at Washington Mutual, which from my readings is one of the banks more likely to fail. I understand the accounts are FDIC-insured, but in the unlikely that more banks fail than the FDIC could possibly insure I figure I may as well switch to a "safer", better capitalized bank.



Haven't found it yet though :-P.



Anyone have any suggestions for a well-capitalized bank that has a good presence in Irvine?</blockquote>
Look for the one offering the lowest interest CD rates. If they aren't willing to pay above average interest rates in order to attract capital to shore up their reserves, then they are probably ok... for now.
 
In no particular order...



Union Bank

Farmer's & Merchant

California National Bank

City National Bank

US Bank

Bank of America

Wells Fargo

Bank of the West
 
[quote author="usctrojanman29" date=1216138056]In no particular order...</blockquote>


Union Bank - <em>Good, but they have a lot of homebuilder loans, and loans that are defaulting at high rate. <a href="https://www.snl.com/Cache/1001140747.PDF?FID=1001140747&O=PDF&T;=&D;=&IID=1022285&Y;=">They accounted for 73% of the increase in non-performing assets for last quarter</a>. That, and they have been ramping up their loan production, especially in commercial.</em>



https://www.snl.com/Cache/irchart-1022285-54bcdc8b-2dae-4272-88db-708b3d87f08a.png



Farmer's & Merchant - <em>Pretty solid. Loans increasing but so are deposits. Net income shrank in the last quarter, but the provisions for loan losses are minimal compared to the rest of the industry.

</em>

California National Bank - <em>Not publicly traded. Advertised HELOCs below market like mad. Makes me worry if they are eating those HELOCs like all the other banks.</em>



City National Bank - <em>Assets shrinking, loans increasing, homebuilder exposure, return on assets shrinking, and return on shareholder shrank by 500 BPS. NPAs for commercial loans increased 123% from Q3 to Q4. Residential NPAs increased 733% YOY. <a href="http://www.cnb.com/ir/quarterlyearnings/1st_qtr_2008.pdf">Total NPAs increased 401% YOY.</a></em>



US Bank - <em><a href="http://library.corporate-ir.net/library/11/117/117565/items/287925/USB_1Q08_Release.pdf">Do your research</a>. Large trustee of MBS pools</em>.



Bank of America - <em>Countrywide, nuff said.</em>



Wells Fargo - <em>Subprime, ALT-A. and loves to charge fees.</em>



Bank of the West - <em><a href="https://www.bankofthewest.com/BOW/assets/vcmStaticContent/BOWInternetContents/AboutUs/Documents/AnnualReport-FinancialStmt/2007_Annual_Report_Financials.pdf">On the downside with the others.</a></em>
 
IndyMac, of course! They're owned by the federal government. *Nobody* is going to shut them down. And if they ever run out of cash, they can print more!



Seriously, I'm not kidding. There's no safer place to put your money.
 
>><em>US Bank - Do your research. Large trustee of MBS pools.</em>



Actually, that's the best place to be involved in an MBS pool. All you are doing is servicing the trust and collecting the fee. At worst, as the pools blow up, they would lose the servicing revenue and someone might try to squeeze them for a small settlement as part of any overall litigation, but there is no real exposure there.
 
[quote author="Astute Observer" date=1216166358]anyone has any idea about Capital One? Its CD via Costco is pretty attractive at times.</blockquote>


Capitol One was a great short. It's CD rates are attractive because they are insolvent.
 
Not sure if anyone else had a chance to see Bernanke at the hearing today....but he admitted that 95 banks had the potential to become insolvent. It was from some study that I didn't catch the name of.



Now, which 95?
 
[quote author="Trooper" date=1216169217]Not sure if anyone else had a chance to see Bernanke at the hearing today....but he admitted that 95 banks had the potential to become insolvent. It was from some study that I didn't catch the name of.



Now, which 95?</blockquote>
He is refering to the 95 financial institutions on the FDIC "troubled" list. Indymac was not on the list when it failed. My guess is the number on the list is incorrect by a factor of ten.
 
[quote author="gwailo168" date=1216123315]What is everyone's thought on Credit unions like OCTFCU? or Wescom?</blockquote>


anyone know?
 
I am still hoping for WAMU to fail next. .. I want my piece of the FDIC pie earlier than later. No where near $100 K in my account. Safe than any other bank.
 
[quote author="graphrix" date=1216145292][quote author="usctrojanman29" date=1216138056]In no particular order...</blockquote>


Union Bank - <em>Good, but they have a lot of homebuilder loans, and loans that are defaulting at high rate. <a href="https://www.snl.com/Cache/1001140747.PDF?FID=1001140747&O=PDF&T;=&D;=&IID=1022285&Y;=">They accounted for 73% of the increase in non-performing assets for last quarter</a>. That, and they have been ramping up their loan production, especially in commercial.</em>



https://www.snl.com/Cache/irchart-1022285-54bcdc8b-2dae-4272-88db-708b3d87f08a.png



Farmer's & Merchant - <em>Pretty solid. Loans increasing but so are deposits. Net income shrank in the last quarter, but the provisions for loan losses are minimal compared to the rest of the industry.

</em>

California National Bank - <em>Not publicly traded. Advertised HELOCs below market like mad. Makes me worry if they are eating those HELOCs like all the other banks.</em>



City National Bank - <em>Assets shrinking, loans increasing, homebuilder exposure, return on assets shrinking, and return on shareholder shrank by 500 BPS. NPAs for commercial loans increased 123% from Q3 to Q4. Residential NPAs increased 733% YOY. <a href="http://www.cnb.com/ir/quarterlyearnings/1st_qtr_2008.pdf">Total NPAs increased 401% YOY.</a></em>



US Bank - <em><a href="http://library.corporate-ir.net/library/11/117/117565/items/287925/USB_1Q08_Release.pdf">Do your research</a>. Large trustee of MBS pools</em>.



Bank of America - <em>Countrywide, nuff said.</em>



Wells Fargo - <em>Subprime, ALT-A. and loves to charge fees.</em>



Bank of the West - <em><a href="https://www.bankofthewest.com/BOW/assets/vcmStaticContent/BOWInternetContents/AboutUs/Documents/AnnualReport-FinancialStmt/2007_Annual_Report_Financials.pdf">On the downside with the others.</a></em></blockquote>
I work at Cal National and can tell you that our HELOC promotion was not all that successful. We also have very few commercial real estate loans that are in trouble mainly because we have always been a very conservative lender focusing on true LTC (total CASH equity in a project). I've lost many deals to more aggressive lenders like WAMU and Wachovia last year which pissed me off, but I guess now I'm glad that we didn't stretch to get those loans. The bank also never got into the market crazy of doing those garbage residential mortgage loans and never took the invite to the MBS/CDO/CMO party.



If not for us, PFF Bank & Trust would have been the next bank of the Fed's list to visit. We are very well capitalized and are doing more business then every cherry picking commercial real estate deals, guess the market has come back to us. There's also something to be said about being a privately-owned bank in the current stock market environment.
 
Backtracking to the FDIC watch list . . . I was poking around the site today to see what, exactly, lands one on the watch list and to see if that information is easy to create two sets of books for, or otherwise mislead the examiners.



<a href="http://www.fdic.gov/bank/individual/bank/">Interestingly enough, "[t]he FDIC never releases its ratings on the safety and soundness of banks and thrift institutions to the public."</a>



So I am curious to know where the statement that IndyMac wasn't on the watch list comes from. It's not that I don't believe it, but it would require some inside knowledge.



Also, if you want information about the financial condition of a bank, the FDIC provides the reports <a href="http://www4.fdic.gov/call_tfr_rpts/">right here</a>. It's a clunky website and the reports may not be easy to understand, but you can do as my hubby did and compare ING's to, say, Downey's, to see how they compare. As I understand it, comparing the "Total Capital Ratio" lines is a good measure. But don't quote me on that! I'm still trying to decipher them myself.
 
<em>What is everyone?s thought on Credit unions like OCTFCU? or Wescom?

</em>

I just got an email from my credit union addressing the IndyMac issue. There is some good info in it about the dollar amount covered.



<img src="http://webmail.aol.com/37668/aol/en-us/Mail/get-attachment.aspx?uid=1.20589145&folder=NewMail&partId=4" alt="" />
 
I would not have substantial amount in a credit union now. The credit union insurer is not a division of the Fed or anything else and when it runs out of funds, it's done.


ING and WaMu are toast. It is just a matter of time.


The FDIC did publish a list of the banks it considered to be in trouble. I do not remember where I saw it, but it was MSM.
 
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