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Thread: Banks taking major hits in America?

  1. #1
    Expatriate American Patriot's Avatar
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    Default Banks taking major hits in America?

    National City plunges amid broad bank fears

    By JOE MILICIA 1 day ago

    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.
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  2. #2
    Creepy Ass Cracka & Site Owner Ryan Ruck's Avatar
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    Default Re: Banks taking major hits in America?

    I hope nothing happens to them. They are a big customer of ours, with I believe almost 100% Diebold ATMs.

    ETA: I used to be a Provident Bank customer. NCB then came in and took them over a couple years ago. Shortly after I had a problem with my bank account. Despite having been a customer of Provident for a number of years prior, NCB refused to help me get my problem fixed. I ended up closing out my account and going to US Bank. I've been very happy with them. Just an aside I thought I'd share.

  3. #3
    Forum General Brian Baldwin's Avatar
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    Default Re: Banks taking major hits in America?

    In all truth I would imagine it was a whole lot of shady dealings that got these banks into their current situations. McCain mentioned that he thought there needed to be an investigation into these banks along with certain real estate investors. That leads me to believe that Washington is well aware of what's been going on and many of them have taken their share of soft monies from these groups in one form or another... Like for example, Obama's Super Expensive House for pennies on the dollar loan.
    Brian Baldwin

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