Feds Close Bank
Three Ameribank branches assumed by Citizens BankFrom Staff, Wire Reports
Federal regulators have shut down Ameribank Inc., a small bank with five branches in West Virginia and three in East Ohio, saying it overextended loans for the rehabilitation of distressed properties.
It was the 12th failure this year of a federally insured bank.
Ameribank's three Ohio branches were located in St. Clairsville, Dillonvale and Tiltonsville.
The Federal Deposit Insurance Corp. has been appointed receiver of the bank, based in Northfork, W.Va. It had $115 million in assets and $102 million in deposits as of June 30.
The FDIC said Friday the bank's insured deposits will be assumed by Pioneer Community Bank Inc. of Iaeger, W.Va., and Citizens Savings Bank in Martins Ferry.
Its branches in West Virginia will reopen Monday as offices of Pioneer Community Bank and its Ohio branches will reopen Sunday as offices of Citizens Savings.
Ameribank ran into trouble because of "excessive growth" in the construction loans for property rehabilitation, mainly in low- and moderate-income housing markets, according to the federal Office of Thrift Supervision, the bank's primary regulator.
The April-June quarter marked the fourth consecutive quarter of net losses and capital erosion for Ameribank, the thrift agency said in a news release. The agency deemed the bank to be "critically undercapitalized" and found it was unable to develop a viable plan to restore capital to an adequate level.
The regulators tagged Ameribank as a troubled institution in May 2007 and issued a formal enforcement order to the bank in October, saying it had failed to comply with their earlier directives.
Construction and development loans have been the fastest-growing category of troubled loans for U.S. banks, and many banks have heavy concentrations of them in their lending portfolios, according to the FDIC. Some small banks are considered especially vulnerable.
The 12 bank failures so far this year compare with three for all of 2007, and federal banking officials have said that more banks are in danger of collapse.
Ameribank has operated five branches in West Virginia and three branches in Ohio.
The FDIC estimated its resolution will cost the federal deposit insurance fund $42 million.
Regular deposit accounts are insured up to $100,000; individual retirement accounts held in banks are insured up to $250,000.
Concern has been growing over the solvency of some banks amid the housing slump and the steep slide in the mortgage market. The pressures of tighter credit, tumbling home prices and rising foreclosures have been battering many banks, large and small, across the nation.
The largest bank failure by far this year has been that of savings and loan IndyMac Bank, which was seized by regulators on July 11 with about $32 billion in assets and deposits of $19 billion.
Pasadena, Calif.-based IndyMac was the largest regulated thrift to fail in the United States and the second-largest financial institution to close in U.S. history, after Continental Illinois National Bank in 1984.
The FDIC has been operating the bank, now called IndyMac Federal Bank, under a conservatorship.
The FDIC plans to raise insurance premiums paid by banks and thrifts to replenish its reserve fund after paying out billions of dollars to depositors at IndyMac. The fund is currently at around $45.2 billion, down from about $53 billion at the end of last year and below the target minimum level set by Congress.
Of the 8,500 or so FDIC-insured banks in the country, 117 were considered to be in trouble in the second quarter.
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EllisWyatt
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09-23-08 6:42 AM
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wvforsale Do you realize how ridiculous this argument is? Who in their right mind would be angry at LESS revenue flowing into federal coffers? I, for one, am not angry at all. In fact, if they would also cut spending, I would be happy as a ****** in jail!
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EllisWyatt
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09-21-08 5:32 PM
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wvforsale You proved my point. If revenues AFTER tax cuts are the same, or more, than they were BEFORE tax cuts, lower rates led to higher revenues. This isn't rocket science.
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EllisWyatt
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09-21-08 2:12 PM
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Realistically, the government would follow a sensible financial plan such as this: Shut down the Department of Commerce, the IRS, the REA, Dept. of the Interior, Health and Human Services, Transportation, Treasury, State & Homeland Security. Create two departments, Department of Domestic Affairs & Department of Foreign Affairs. Reduce the waste at the Pentagon and stop buying crap that our military doesn't even want. Ban all lobbying of individual congressman and senators by corporations, which does not limit your individual right to petition the government. We should privitize Social Security & Medicare, do away with the prescription drug plan, create a plan to insure children & also adults who fall though the cracks, privitize health care, increase our use of technoloy, get government of health care, housing and education and end all foreign aid. Also, we should deport all illegals and fine any company that hires them $250,000 for each illegal they employ, without
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EllisWyatt
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09-21-08 2:07 PM
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wvforsale Tax cuts DO lead to higher revenues. Federal tax receipts hit a record high in 2007. How would that be possible with tax cuts? By allowing workers and businesses to keep more of their own money, the economy benefits. People who lack understanding of economics think spending is the most important thing. Not true. Even the "rich" can only spend so much. The remainder goes into a bank, where it is lent out to start businesses and buy homes, or the stock market, where it is used as business capital, or directly into a new business, where it spends to create a startup and buys new equipment and hires people. Even if the revenue difference was ZERO, we should still embrace tax cuts. Less money for the government means more money for us. Less money for the government leads to less power for the government.
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EllisWyatt
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09-21-08 8:10 AM
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wvforsale Well, Berkshire is down 30% or so this year? Buffett is brilliant as a value investor. He stinks as a macroeconomist. He complains that his secretary pays a higher tax RATE than he, failing to mention that her $60,000 salary is in WAGES and his $45 million income is from CAPITAL GAINS and DIVIDENDS. Of course her actual rate would be higher! But who pays more taxes? She might pay $11,000 where he pays $6.25 million. He also believes in higher taxes. Well, the facts show that higher tax rates lead to lower tax revenues and vice versa. The only reason our deficit has increased post Bush tax cuts is that spending has increased exponentially. Do you know that the government doesn't budget like you or I? If you need to buy a $200 microwave, you save up and buy it. If the government bought the same microwave, it would budget $200 for this year. Once the microwave was purchased, however, that $200 would remain in the budget in each subsequent year!
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bman5252000
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09-20-08 7:07 PM
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now that the dollar is not worth the paper its written on i have some fruit trees and veggie plants for trade plant your garden now get prepared for worse times to come
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formerohvalleyresident
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09-20-08 5:20 PM
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ForSale, the Heritage foundation is a Conservative Think Tank and there is not a shred of evidence to support your implication that the DEFICIT increases from tax cuts. Tax cuts from JFK, Reagan, and Bush have ALWAYS increased REVENUE. The problem is increased SPENDING increased the DEFICIT faster, and the GOP did a horrible job of allowing spending to increase beyond the revenue increases. Unfortunately, DEMs want MORE spending and MORE taxes on the rich, which clearly can’t work. 10% of the rich are paying for 70% of the total tax bill. The reality is the poor and lower middle class do not PAY any significant taxes; so a tax cut will benefit only those who are PAYING, namely the rich! Also the US dollar has lost half its value in 30 years against world currencies. Read the “10 myths about Budget Deficits” on the Heritage site. I quote in part: Just as President Clinton receives too much credit for balancing the budget, President George W. Bush receives too much blame ...
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wvufan
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09-20-08 2:45 PM
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Your numbers don't seem right from ones I have seen in the past but I don't have time to research it right now. I will agree with you that spending is out of control. Bush is not a true conservative a true conservative cuts taxes and spending not cutting taxes and increasing spending and bail outs of private corporations. And I agree lets through them all out. But, I still think tax cuts are a good thing the less of my money the government has to waste the better.
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wvufan
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09-20-08 10:04 AM
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wvforsale: The banking industries failure has nothing to do with the Bush Admin in fact it has to do with the democrats in congress and Bill Clinton pushing for more loans for lo income individuals. Every time taxes are cut we see more revenue to the IRS how do you explain that? When taxes are cut people have more money to spend thus businesses pay more in taxes because of their higher profits. That is good for the economy. The two are not connected at all. We need to allow these banks to fail and quit bailing them out for their own stupid mistakes. You make a risky loan pay the price when it defaults.
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EllisWyatt
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09-20-08 6:06 AM
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Let's keep bailing out multi-billion dollar companies. Why not? Of course, if you owe $1,000 in back taxes, the feds would be all over you with threats and demands that you live up to your obligations, etc. and talking about fiscal responsibility, helping taxpayers and so on. On the other hand, if you are CEO of a large company, your company is saved and you can keep your job and/or your golden parachute. **** that! If the taxpayers bail out a company, all of the top executives should give back every dime of their earnings for the last 5 years. Why should we sacrifice so that they can keep their millions?
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