Log in

No account? Create an account
Wakum Mata!
Politcally Incorrect Musings
Latest Bank Failures 
28th-Jul-2008 08:16 am
Bank Failures: Consequences Of Expansion
By ROBIN SIDEL and DAMIAN PALETTA (Wall Street Journal Online)
July 28, 2008

The latest bank failures as the industry slogs through its worst crisis in a generation are showing the consequences of the frenetic expansion that took place when times were good.


The latest example came late Friday, when federal regulators shut down First National Bank of Nevada, based in Reno, and First Heritage Bank of Newport Beach, Calif. The $3.2 billion in deposits of the closed banks were acquired by Mutual of Omaha Bank, a unit of insurer Mutual of Omaha. The branches are reopening Monday.

The two failed banks were units of closely held First National Bank Holding Co., based in Scottsdale, Ariz. Both had been grappling with problem loans and had a combined first-quarter loss of about $140 million. First National Bank of Arizona, which was absorbed into First National Bank of Nevada in June, had a first-quarter loan-loss provision of $95.9 million. [...]


Emphasis mine.

It ain't over. More will come. I'm just sayin', is all.
28th-Jul-2008 03:32 pm (UTC)
Loan Loss Provision
An expense set aside as an allowance for bad loans (customer defaults, or terms of a loan have to be renegotiated, etc).

This would be a bank's equivalent of a manufacturing company's allowance for returns on goods sold.

Also know as a valuation allowance or valuation reserve.
(Deleted comment)
28th-Jul-2008 06:33 pm (UTC) - Re: off topic but cool
Nifty technology for those that actually have use for an alarm clock.
This page was loaded May 22nd 2019, 9:27 pm GMT.