Say What?: The ShoreBank 'Closure'

Mish shares this from the WSJ:

Regulators seized ShoreBank Corp. on Friday and agreed to sell assets to a team led by the community lender's executives and backed by several large U.S. financial firms.

The bank closure, among the 118 failures in the U.S. this year, caps months of uncertainty for a $2.16 billion Chicago bank that had ties to the Obama administration and deep roots on Chicago's South Side. The new institution will be known as Urban Partnership Bank and led by William Farrow, a former First Chicago Corp. executive who was ShoreBank's president and chief operating officer at the time of its failure.

The decision to sell to management is a rare move by the Federal Deposit Insurance Corp., which generally bars investors who own more than 10% of the failed bank from bidding on its assets. The FDIC also typically wants to know if bidders have "ever been an officer or director of a failed institution" and "participated in a material way in one or more transactions that caused a substantial loss to any such failed institution," according to an FDIC document.

The structure of the deal "is unusual," said Atlanta banking attorney Chip MacDonald.

The holding company will remain intact, according to a person familiar with the deal. Urban Partnership is backed by a consortium of large U.S. financial institutions, including Bank of AmericaCorp., Goldman Sachs Group Inc. and Morgan Stanley.


This stinks to high heaven.

In the 1980's, Tennessee went through a bank scandal with Jake Butcher and his family and cronies. Jake went to the pen, spent seven years behind bars. Lost everything, had to rebuild his life from the ground up.

These folks get bailed, and handed the bank back.

Somebody owes Jake an apology. His only mistake was that he only stole millions, unlike the backers of Urban Partnership.

The Organic Fertilizer Rapidly Approaches An Intersection With The Electrically-Powered Portable Bladed Air-Moving Device

So,  here we have news from the FDIC that they plan to assess $45 billion dollars from the banks left standing in order to cover their losses on the banks that have fallen/are about to fall and can't get up.

And the little solvent banks are going raise that cash from where?

New customers and loan business?

Present customers?  Assess fees on each account and/or check processed?

Laying off employees?

Closing branches and trying to sell off the buildings? (It took three years for a bank to unload a closed branch locally.  Sold or leased it on the cheap to two guys who installed a liquor store in it!)

Where?

Will $45 billion really be enough? Or is this just round one of an ongoing shakedown of the the solvent banks?

I mean, I'm at a loss.  This past Friday afternoon, the final Friday of September, in the final hour of business, I was the only customer at my bank. I hung around and gossiped, just to see if it was a fluke of timing.   (I was making deposits, sure as shootin' wasn't talking to them about taking on more debt!)

It wasn't a fluke. I was it. The tellers were doing cross-stitch, and looking for tasks to do on behalf of their employer.

And this bank's not on the 'watch list'.