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 My bank failed

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Kimmie
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PostSubject: My bank failed   March 6th 2009, 10:32 am

http://www.fdic.gov/bank/individual/failed/sherman.html

Quote :
John Munn, the department’s director, said the bank lent money to area farmers for commodities investments.

The loans failed when commodities prices tumbled late last year, and the bank’s capital reserves were depleted.

“Things really went south quickly,” Munn said.

The
bank contacted the Department of Banking and the Federal Deposit
Insurance Corp. in late January after the problem was discovered, he
said.

On Feb. 3, the department ordered a $34 million capital call from the bank’s board of directors that was not met....

Munn said Sherman County Bank’s involvement in commodities trading was rare among the state’s banks.


more of the story
http://www.nebraska.tv/Global/story.asp?S=9847729

Quote :
According to FDIC spokesperson David
Barr, the bank lost money in loans to approximately 30 farmers. Kuzsak
said he knows many of them, and he doens't believe it's entirely
farmers' fault. "It was the power of attorney that farmers didn't know a lot of times was happening. It
happened, they got the statement, it showed their loss," he said.


so basically, the President, my neighbor , approved loans to 30 farms to trade their corn on the commodities market at the Chicago board and trade.. corn at 7 dollars a bushel. When corn plummeted to 2 dollars a bushel, the farmers couldn't pay their loan and the bank failed. 1 farmer here in town has lost 13 million... it seems that most of these big time farmers will be wiped out completely.
This isnt a normal practice of banks and it looks like some will be in big trouble.


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Nancy AABB Admin
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PostSubject: Re: My bank failed   March 6th 2009, 10:43 am

that sucks. Good thing we now have the FDIC... although they are going to be in trouble too if there are too many more bank failures. At least your deposits are safe.
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snow
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PostSubject: Re: My bank failed   March 6th 2009, 10:45 am

Hate to hear this..were these farmers involved with ethanol? I'm not up on the types of production with corn, but there probably will be changes made with this type of farming if used with ethanol.

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snow
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PostSubject: Re: My bank failed   March 6th 2009, 10:47 am

Don't they only insure up to a certain amount? I thought it was $200,000?

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PostSubject: Re: My bank failed   March 6th 2009, 10:49 am

snow wrote:
Don't they only insure up to a certain amount? I thought it was $200,000?


they upped it to 250,000 recently
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Kimmie
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PostSubject: Re: My bank failed   March 6th 2009, 10:55 am

snow wrote:
Hate to hear this..were these farmers involved with ethanol? I'm not up on the types of production with corn, but there probably will be changes made with this type of farming if used with ethanol.

Not sure if it was ethanol, but just corn.....

the ethanol plant that my husband built 2 years ago, 20 miles from here, claimed bankruptcy last October, when corn plummeted. The cant make ethanol on 7 dollar corn.

In Nebraska, our super unleaded is cheaper than regular unleaded because of the ethanol plants here. But in the big cities, it's very high to use. Especially E85, and the vehicles that run on E85 in large cities, normally it's alot higher, here in nberaska, E85 is about 1.00 a gallon cheaper than super unleaded, but my truck gets 6 miles per gallon less when i run on E85, so i dont use it.
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jfan
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PostSubject: Re: My bank failed   March 6th 2009, 10:57 am

The economic news gets more and more scary as each day goes by. I am sorry for those loss the people involved suffered. It is a scene being replayed throught the country.

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Lori
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PostSubject: Re: My bank failed   March 6th 2009, 11:02 am

Honest to God I hate to open the newspaper in the morning due to the awful headlines.
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Kimmie
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PostSubject: Re: My bank failed   March 6th 2009, 11:08 am

It is quite eye opening.

I know that my husband said to only leave so much in the bank, he wants the rest of his cash in his safe!

It seems there is a report this morning that the FDIC needs more money as well.

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inkydinkydoo
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PostSubject: Re: My bank failed   March 6th 2009, 1:14 pm

Wow! You always think it will happen to someone else, don't you? You won't lose anything from this, will you, Kimmie?

I wonder how it will work with the FDIC. Is it transparent to the customers, or are their savings placed on hold till FDIC responds? If you have to wait, I sure hope the FDIC is better than FEMA.

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Kimmie
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PostSubject: Re: My bank failed   March 6th 2009, 1:19 pm

inkydinkydoo wrote:
Wow! You always think it will happen to someone else, don't you? You won't lose anything from this, will you, Kimmie?

I wonder how it will work with the FDIC. Is it transparent to the customers, or are their savings placed on hold till FDIC responds? If you have to wait, I sure hope the FDIC is better than FEMA.

actually, it was a very smooth transistion. Also, very hush hush. The FDIC came in on presidents day and worked to transfer all the accounts to the other bank that took over the loans, the deposits, and the other assets.

All the money in the bank is safe up to the 200,000 per account.(we dont have that much so that isnt a big deal) and our loan is held by the bank , so that just got transfered to the other bank.

The people that are really hurt are the employees who lost their wages, stocks, and retirement. Stock holders also lost everything. The employees still have their jobs, they just had to go down to entry level pay, etc.

There really wasnt any delay or waiting period for people who had accounts there.
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inkydinkydoo
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PostSubject: Re: My bank failed   March 6th 2009, 3:12 pm

Well, that's good to know. I always wondered how that would work. I sure do feel bad for the employees and the stockholders, though.

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PostSubject: Re: My bank failed   March 6th 2009, 3:18 pm

inkydinkydoo wrote:
Well, that's good to know. I always wondered how that would work. I sure do feel bad for the employees and the stockholders, though.

The FDIC is a case where government can do things right.
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