Saturday, July 10, 2010

U.S. Bank Failures Double in Year

WaPo reported:

Regulators shut down two banks in Maryland and one each in New York and Oklahoma on Friday, raising to 90 the number of U.S. bank failures this year.

The pace of bank failures this year far outstrips that of 2009. By this time last year, regulators had closed 45 banks.

The rate is double. Private equity underwriters (PEU's) are eager to take over failed banks at distressed sale prices, preferably along with FDIC subsidies.

The U.S. Treasury was as feckless as the FDIC in Carlyle Group's Hampton Roads Bankshares. Carlyle's $72 million got 23% of Hampton Roads, while Treasury's $80 million got 6%. Taxpayers put in more and got less.

With 271 banks on the "extreme risk of failure list", I smell PEU opportunity.