awgee - 07 August 2008 07:00 PM

ipoplaya - 07 August 2008 01:53 PM

ABC123 - 07 August 2008 01:47 PM

I think the article said they are just not allowing anymore brokered accounts arranged through financial intermediaries.

It’s pretty bad when (government) regulators have to tell you to find “experienced and competent individuals” to fill the CEO position.

I’m thinking the extra $200 over the next six months vs. Countrywide probably isn’t worth the hassle of moving the funds when they go under…  Countrywide Bank is offering 4.1% on 7 months and IndyMac Federal amazingly is offering 4.15% on 9 months.  I can’t find much better out there.

IndyMac is probably one of the safest places you can keep your money right now.  I am not being sarcastic.  If you open a CD with IndyMac, you are actually opening a CD with the FDIC and whomever the FDIC later decides to transfer your deposit to.

I think you are correct awgee.  If they had 4.15% for six months, I’d be all over it…  I have my nine-monther already.  Need 6-7 month ones to complete my ladder.

Wachovia is offering 4.16% / 4.25% APY for a 12-month CD.
I was able to get my bank to match their price, so I didn’t have to move my money.
 
Just ask your bank to match their price. 
I’ve had two banks match their price without any problem. 
I just ask for the manager.

*ring ring*

Hello, and thank you for calling Downey Savings, how would you like to withdraw your money, er I mean help you.

Hello, this is the Office of Thrift Supervision, and we need for you to stop lending, call and ask us if you can pay a dividend, and limit your asset growth.

What?! Why?!

Uh… what are you stupid? You have had a run to the tune of $219 million, 15% of your “assets” are non-performing, and you have been borrowing from the Fed like gambling addict in Vegas.

Oh… is that bad? Hold on… let me see if I can transfer you to our CEO, oh no wait… he quit last week. Uh… maybe I can find someone, can I put you on hold?

Regulators limit some Downey activities
Bank sees net deposit inflows after period of ‘elevated’ withdrawals
By Alistair Barr, MarketWatch
Last update: 6:23 p.m. EDT Aug. 11, 2008
SAN FRANCISCO (MarketWatch)—Downey Financial Corp.‘s main regulator has imposed several restrictions on the lender’s activities, including limits on dividends, asset growth and new borrowing, according to a filing Monday.
Downey also said that it’s experienced “elevated” levels of deposit withdrawals after reporting a $218.9 million second-quarter net loss in late July. The company stressed that net deposit inflows returned more recently, but also warned that if outflows resume it would have to raise new capital or borrow more to meet liquidity needs.
Shares of Downey fell 8.1% to $1.93 during after-hours trading on Monday. The stock dropped 6.3% in regular trading.
Since Downey reported its second-quarter loss on July 24, the Office of Thrift Supervision, its main regulator, has imposed several restrictions, the company said in its quarterly filing with the Securities and Exchange Commission.
The Newport Beach, Calif.-based thrift has been hit hard by a surge in bad loans. Nonperforming assets made up more than 15% of total loans at the end of June. The company said earlier this year that it has set up a special committee of directors to explore strategic alternatives, including raising more capital. See related story.
Downey can’t pay dividends without checking with the Office of Thrift Supervision first. The company’s bank can’t increase assets beyond net interest credited on deposits without OTS approval. It can only renew debt or borrow more money if the OTS doesn’t object, according to the filing.
Downey also can’t pay certain types of compensation and severance; it must tell the OTS before changing directors or executives, and before going ahead with transactions between any of its affiliates or subsidiaries, the filing also disclosed.
“We don’t comment on supervision of individual companies,“ said William Ruberry, an OTS spokesman. Downey Chief Financial Officer Brian Côté declined to comment.
A search of formal, public-enforcement actions by the OTS in relation to Downey on the regulator’s Web site yielded two actions from 1999 and Aug. 30 last year.
Downey’s main source of borrowing is the Federal Home Loan Banks, or FHLB. At the end of June, the thrift said it had borrowed $1.5 billion from the FHLB, which was a little more than 12% of total assets.
By the end of Friday, Downey’s FHLB borrowing had jumped to $2.8 billion. It’s allowed to borrow another $200 million, Downey noted in its quarterly SEC filing.
Downey also said its bank is allowed to borrow up to $1.5 billion from the Federal Reserve Bank of San Francisco. At the end of Friday, it hadn’t borrowed any money from this source, according to the filing.

So . . . last rites this coming Friday could be at Downey, or it could be at Vineyard.  Any guesses as to which?  I’d say both, but that might require more personnel than the FDIC has.

EvaLSeraphim - 11 August 2008 08:21 PM

So . . . last rites this coming Friday could be at Downey, or it could be at Vineyard.  Any guesses as to which?  I’d say both, but that might require more personnel than the FDIC has.

I thought Vineyard was a goner for last Friday, but now I would have to say both Vineyard and DSL for this Friday.  The FDIC will have about $45 billion after IndyMac.  I wonder how much Downey will cost us?

I dunno… I would add First Fed to the list, maybe a trifecta for Cali banks come Friday. Some highlights of their latest 10Q...

YOY: Deposits down by nearly a BILLION, yes… that is B I L L I O N.

YOY: Fed advances of over $1.25 BILLION, yes… that is B I L L I O N.

YOY: REO up 720%.

Don’t even get me started on their REO write downs/gains on sale or the positive of $1.5bil in Q2 2007 to negative of $154mil on net principal loan collections.

Eh, I vote for the Trifecta Friday.

No…  First Fed can’t be going down.  Their new branch in Irvine will save them!  Besides, they have a big banner on their home page that says “Your deposits are safe at First Fed.“  Yes, I feel very confident in a bank when I see something like that.

EvaLSeraphim - 12 August 2008 07:34 AM

No…  First Fed can’t be going down.  Their new branch in Irvine will save them!  Besides, they have a big banner on their home page that says “Your deposits are safe at First Fed.“  Yes, I feel very confident in a bank when I see something like that.

I was confident when I read the op/ed letter from a chairman of First Fed in the LA Times.

First Fed worries are unfounded

Chairman: First Federal Bank of California

I should have wrote back suggesting Babette read that thing called a 10Q. And maybe understand that mortgages on their books are considered “assets” and when those “assets” go down in value they need to raise more assets for the liability (deposit) to asset ratio. But, hey I don’t have the time to show a chairman that, and I am sure she knows more than I do, and sees something I can’t in the 10Q.

graphrix - 12 August 2008 01:29 AM

I dunno… I would add First Fed to the list, maybe a trifecta for Cali banks come Friday. Some highlights of their latest 10Q...

YOY: Deposits down by nearly a BILLION, yes… that is B I L L I O N.

YOY: Fed advances of over $1.25 BILLION, yes… that is B I L L I O N.

YOY: REO up 720%.

Don’t even get me started on their REO write downs/gains on sale or the positive of $1.5bil in Q2 2007 to negative of $154mil on net principal loan collections.

Eh, I vote for the Trifecta Friday.

Sweet, my CD will be on deposit with the new FDIC-run Downey Federal Bank.  Can’t get much safer than that…

First Fed rates suck.  They don’t have the “offering-up-exorbitant-rates-to-attract-low-cost-capital” stench about them.  I think Vineyard goes first, then Downey, then FF.

The Shareholders of “DSL” Downey voted with their feet today.
Stock was @ 2.10 on Monday. Today Closed at $ 1.57.  -25%  OUCH.

Not so good for the Bonds either.
Moody’s downgraded the senior unsecured ratings of Downey Financial to B3 from B1. All Downey ratings are under review for downgrade.

Looks like the water in the Porcelin Fixture is spinning rapidly at this time.
I cant imagine anyone would risk having more than the FDIC limit in this institution.

One of those institutions has over a billion dollars in uninsured
deposits.  That’s a lot of clueless people.  Maybe some of them
will take foreclosure McMansions in satisfaction of their deposits—but
wait—-it doesn’t work that way.

300 banks could fail

The Washington Post reports that the number of bank failures has been surprisingly low. But the crunch count is likely to grow as the problem bank list triples from 90 to 300 over the next three years. Meanwhile, the Federal Deposit Insurance Corporation (FDIC) could run out of money to pay off depositors of future failed banks unless it raises its deposit insurance rates from their current 5.4 cents per $100 deposits.

Man… Friday just can get here soon enough. CR posted about the downgrade at Downey, and here is the full article for those who don’t want to register for the S&P;site…

NEW YORK (Standard & Poor’s) Aug. 13, 2008—Standard & Poor’s Ratings Services
said today that it lowered its counterparty credit rating on Downey Financial
Corp. (Downey) to ‘B+/C’ from ‘BB+/B’. The rating will remain on CreditWatch
Negative where it was originally placed on June 3, 2008.
    This action was taken in response to our concerns that Downey’s weakened
financial profile has left it exposed to potential funding and liquidity
problems. “Although Downey still had approximately $2.4 billion in available
liquidity between its remaining lines of credit and cash on the balance sheet,
deposit outflows in July and the recent drawing down of most of its FHLB lines
have reduced Downey’s liquidity and available lines of credit. This, coupled
with Downey’s already weakened financial profile and asset quality problems,
has reduced the company’s flexibility and greatly weakened its franchise.
Downey has since reversed 40% of its July deposit outflows,“ said Standard &
Poor’s credit analyst Robert B. Hoban, Jr. Downey has since reversed 40% of
its July deposit outflows. We are concerned that depositors in Downey’s
footprint have a heightened sensitivity to potential bank failures after
recent experience and publicity, which increases the possibility that Downey
could experience further material deposit outflows. If that were to happen, it
could overwhelm Downey’s liquidity and/or trigger an adverse regulatory
action, and the rating would have to be lowered an additional several notches.
    California’s deteriorating housing market has had a substantial negative
effect on Downey’s credit performance, financial profile, and capitalization.
Adjusted nonperforming assets (NPAs) at the end of June were $1.4 billion
(11.16% of assets), an increase of 45% from the previous quarter’s already
very high level. Downey’s concentration in California and its level of
exposure to the more at-risk 2006-2007 vintage mortgages is likely to result
in continued asset-quality problems and heightened loss severity. Although
Downey’s capital and reserve levels remain good, further NPA growth may
overwhelm the thrift’s ability to overcome its asset-quality problems. In
addition, another loss on the scale of second-quarter 2008 is likely to
threaten the thrift’s regulatory “well-capitalized” designation.
    Resolution of the CreditWatch will be based on a close monitoring of
Downey’s liquidity, capitalization, and any regulatory action.

It is like watching a row of dominos in slow motion:

Wahovia

Michael Phelps is not only a good swimmer, but he single handily stopped any bank failures this week. The regulators were too busy watching the Olympics to notice the impending doom of many of the banks.

Hat tip to CF for the one liner early today on the regulators were too busy.

Strongest and weakest banks: The X report.

Hat tip to Barry for this absolute gem.

Downey Savings D-

First Fed D+

Vineyard BK D

WAMU D+

The Columbian Bank and Trust Company, Topeka, KS just failed.

$752M assets, $622M deposits, $46M uninsured.

Slowly nibbling away another 1 or 2% of FDIC’s reserves.

FDIC shutters Silver State Bank of Nevada

Son of presidential nominee John McCain was reportedly former board member; closing marks the 11th bank failure this year.

Who’s next ?

That one will cost 500M$ to the FDIC.

As you can see, it’s the state of the FDIC reserves that I’m watching more than the number of bank failures.

Trooper - 05 September 2008 08:53 PM

FDIC shutters Silver State Bank of Nevada

Son of presidential nominee John McCain was reportedly former board member; closing marks the 11th bank failure this year.

Who’s next ?

There is no reportedly about it.

WaMu is not long for this world:

WaMu CDS spreads

awgee - 09 September 2008 12:45 PM

WaMu is not long for this world:

WaMu CDS spreads

So who goes first….WaMu, Downey Savings, or First Fed???

usctrojanman29 - 09 September 2008 01:15 PM

awgee - 09 September 2008 12:45 PM

WaMu is not long for this world:

WaMu CDS spreads

So who goes first….WaMu, Downey Savings, or First Fed???

Is that like the joke that goes something like “A Priest, a Doctor, and an Attorney are in a transatlantic flight all alone, when the plane catches fire midair and starts to lose altitude….........................“?

no_vaseline - 09 September 2008 01:36 PM

usctrojanman29 - 09 September 2008 01:15 PM

awg