Another FDIC-Insured Bank Is Teetering, Closing at 27-1/2 Cents Yesterday, Down 96 Percent in a Year
By Pam Martens and Russ Martens: September 14, 2023 ~
There may be a lesson here: don’t put the word “Republic” in the name of your bank; don’t hold a lot of uninsured deposits; and don’t have wads of unrealized losses on your investment securities.
If those lessons sound familiar, it’s because they played out in stunning fashion earlier this year when the second, third and fourth largest bank failures in U.S. history occurred.
One of those banks that blew up was First Republic Bank, which was put into FDIC receivership on May 1 and later sold, under much controversy, to the already behemoth JPMorgan Chase, the largest bank in the U.S. (JPMorgan Chase can’t seem to stay away from criminal charges. It thus far has notched five felony counts in its belt and is currently being sued by the U.S. Virgin Islands for “actively participating” in Jeffrey Epstein’s sex-trafficking of minors by providing him with more than $5 million in hard cash over a decade.)
Now, another bank with the word “Republic” in its name is in deep distress. The holding company of the current problem bank is Republic First Bancorp (trading ticker FRBK), whose federally-insured banking unit is Republic Bank.
As of June 30, according to regulatory filings, Republic Bank held $6 billion in assets and had 35 branches in Pennsylvania and New Jersey. More than half of its deposits were uninsured. Its SEC filings are not up-to-date but in its 10-Q (quarterly report) for the period ending September 30, 2022, it had this to say about those uninsured deposits:
“As of September 30, 2022, our 100 largest bank depositors accounted for, in the aggregate, 16% of our total deposits. The majority of these deposits are not insured by the FDIC and could present a heightened risk of withdrawal, if such depositors materially decreased the volume of those deposits, it could reduce our liquidity. As a result, it could become necessary for us to replace those deposits with higher-cost deposits or FHLB borrowings, which would adversely affect our net interest income and, therefore, our results of operations.”
Republic First Bancorp’s stock price has declined by 96 percent in the past 12 months as of yesterday’s closing price. Its stock was delisted from Nasdaq last month and it closed at a stunning 27-1/2 cents in over-the-counter trading yesterday.
Republic First Bancorp is far from the only bank holding company that has suffered huge share price losses over the past 12 months. HomeStreet (ticker HMST) has lost almost 75 percent of its market value. It’s a West Coast bank with 60 branch offices in Washington state, Oregon, California and Hawaii. As of June 30, it had assets of $9.5 billion.
PacWest Bancorp, parent of Pacific Western Bank, has also suffered steep share price losses, losing over 70 percent in the past year. Pacific Western Bank has 77 branches and $38 billion in assets as of June 30.
A much smaller bank holding company, Carver Bancorp, is the parent of Carver Federal Savings Bank, which has 7 branch offices in New York and $713 million in assets as of June 30, according to the FDIC. Its stock has lost 56 percent of its value over the past 12 months.
This is just a tiny sampling of the ongoing wreckage to equity values in the banking sector – raising the very serious question as to how this is all going to shake out before year’s end.
A US Bank is Now Denying Customers Access to Money
A US bank is now denying customers access to money according to several reports from users.
Green Dot Bank is now facing fraud allegations from various customers who have been locked out of their account from weeks to months.
Many customers are having difficulty receiving a direct response from the bank’s customer service department, with many claiming to have been given the runaround.
“It been a month and i still haven’t been able to get my money from Walmart green dot. I have ask for a replacement card 4 time haven’t got a card yet my rent is do for last month and this month i think there trying keep my money,” says Marzell Land.
Green Dot bank has been freezing multiple customer accounts resulting in missed bills or the usage of high interest credit cards to get by.
“From Az have not gotten my money since Wednesday I have a family and bills I have to pay. I know when they fixed this problem I’m getting my money and I’m gone like the wind, this is not right .🌋🌋🌋🤬🤬🤬. Just got done going through pandemic now this,” says Bobby Rivera.
What is being done about it? Nothing so far, though many of these reports have been submitted to the Better Business Bureau (BBB).
“My funds are gone. I believe now the bank [Green Dot Bank] is holding it hostage. It’s my SS money and I can’t get it back, they keep extending the date.
I’ll get my new card with my money on it this has been going on since the August 1 and I was in the hospital when I was hacked..I want my money it’s mine not yours green dot,” says Sandra Machuga, who’s reported to FrankNez before.
Also Read: Banks Are Now Closing Thousands of Accounts Daily
The US Treasury Direct is Now Freezing Customer Accounts
Green Dot Bank customers aren’t the only ones experiencing a hold on their money.
The US Treasury Direct (TreasuryDirect) is also freezing customer accounts, leaving users without access to their funds from weeks to months.
Tammarra Johnson reported to FrankNez that TreasuryDirect has frozen her account ever since she made a deposit going all the way back to April.
Users can purchase securities directly from the US Treasury with TreasuryDirect.
However, big financial institutions have access to TreasuryDirect’s auction house which means they have priority over individual customers.
Finance Strategists reports that’s securities purchased through TreasuryDirect cannot be sold in the secondary market before they mature.
“This lack of liquidity could be a disadvantage for investors who may need to access their investment capital before the securities’ maturity.”
But Johnson’s issue is a little different – TreasuryDirect froze the account after a deposit from a settlement.
“My account has been frozen since April right after I deposited $1,500 from a settlement. I mailed in the required form from my bank that was needed to unlock my account and it is still locked.
It’s sad to know financial institutions are basically taking citizens money like times aren’t already hard.”
Just ten months ago, Samuel Clemens reported having a similar issue.
“I’ve been buying iBonds for 10 years. So earlier this year, 4 years after I opened some some proprietorship accounts, t direct finally comes back to me to query some of the registrations.
There’s no way to speak with them. Emails are ignored and written correspondence takes months. In the meantime, my accounts are frozen, and I do not have access to my money. If this were a private business, fraud charges would be laid!
How about organizing a campaign to write to our congressional representatives to fix this? The IRS takes months to process returns, and the treasury can’t handle a simple savings program for citizens. It’s a national disgrace.”
Also Read: Banks Are Now Closing Thousands of Accounts Daily
Retirees Are Being Affected
Beth Williams, 78, says she’s been a WMC cardholder for 10 years now and has been unable to gain access to her WMC/Green account for 20 days now.
What’s more alarming is that prior to the bank freezing the retiree’s account, who says lives on Social Security, she noticed two unauthorized charges prior to reaching out to the bank.
“Since August 4th I have been unable to access my WMC debit card account. On August 3rd I noticed 2 unauthorized charges & immediately contacted WMC/Green. My account had to be frozen per CS/ RESOLUTION dept.
I have been calling and spending hours on hold to reach CS trying to find out when my expedited replacement card is arriving! CS has given to me 4 extended dates when I’ll get my replacement card.
The flimsy CS explanations: 1st-upgrade system & 2nd having technical difficulties! I was told today by CS that the card is to arrive on or before August 27th, and by standard mailing. I am panicking and afraid that I’m being lied to,” she reported to FrankNez.
We’ve asked Williams to keep us updated on the bank’s decisions so we may provide readers with more information who might also be seeking for solutions.
Unfortunately, Williams isn’t the only one being affected; the same bank is freezing accounts with users also reporting several weeks of being locked out.
“I have been going through the same thing with green dot. My funds were hacked at the beginning of August, and I’ve got nothing but the run around from them. They keep telling me my card is on its way. It was supposed to be here August 23 now they’re saying the 31st..I’m on SS and they’re holding my money hostage. What is going on!!” Sandra Machuga reported to FrankNez.
For daily market news and updates, opt in for push notifications. Or follow me on social media below.
Related: Bank of America is Freezing Accounts in New Scandal
Market News Published Daily 📰
Don’t forget to opt-in for push notifications so you don’t miss a single article!
Also, thank you to all of our blog sponsors. This year we’ve been able to increase push notifications slots making it more convenient than ever for new readers to receive their daily market news and updates.
You can also follow me on Twitter, Instagram, Facebook, or LinkedIn for daily news and updates on your favorite stories.
SVB’s demise came suddenly (pdf). On Wednesday, the bank announced a loss of $1.8 billion from selling “available for sale” investment securities. Its holding company announced it would raise $2.25 billion to shore up the bank’s capital. Rather than comforting investors and depositors, this surprising announcement spooked them, “causing a run on the bank.” Within a few hours, depositors withdrew some $42 billion in cash, approximately 25 percent of total deposits, leaving the bank with a negative cash balance approaching $1 billion by the end of Thursday. Unable to shore up this shortfall overnight, the initially illiquid and then insolvent bank failed. California’s Commissioner of Financial Protection and Innovation took over the bank and appointed the FDIC as a receiver.
Watchman: It started with all of the lockdowns.
And what a coincidence that the president of SVB disposed off over 12,000 shares of his stock for a few million dollars just weeks before the failure.
While the FDIC insures deposits up to $250,000, that amount represents less than 10% of SVB’s deposits. The vast majority of the $173 billion in deposits held by SVB are uninsured. “Uninsured depositors will get a receivership certificate for the remaining amount of their uninsured funds,” according to the FDIC. These certificates will receive dividend payments from future asset sales, which may not be enough to repay investors in full.
The problem for SVB was that its assets were overrepresented in its investment portfolio. SBV’s assets were made up of 57 percent marketable securities, mostly US Treasury and mortgage-backed securities. The market value of these bonds has plummeted due to the significant rise in interest rates over the last year. The information will be irrelevant if a bank can hold these bonds until maturity, when they will be reimbursed at face value. But, if a bank is suddenly compelled to sell them in order to produce liquidity, i.e. to meet depositors’ demands for cash withdrawals, it is forced to do so at a loss. A vicious circle is formed. Unplanned asset sales result in losses; losses erode the bank’s financial position, and depositors become concerned and demand their money, necessitating the sale of further assets and stimulating further losses. Similarly with SVB, this can occur in days or even hours.
Banks often fail due to illiquidity rather than insolvency, which was clearly the case with SVB. The question now is how many other banks in the United States are also vulnerable to this type of liquidity risk. Experts are working around the clock to evaluate the data and determine which other banks may be in a similar position to SVB. While SVB has the highest securities-to-asset ratio, several other regional banks have more than one-third of their holdings in similar categories. If their depositors become concerned, bank runs could occur elsewhere in the following days.
SVB’s demise has sent shockwaves through banking and financial markets. On Friday, the NASDAQ Bank Index plummeted over 5%. SVB was a favorite bank for the cryptocurrency business, hence it has been particularly damaged. Coinbase and Binance, two of the main cryptocurrency exchanges, have stopped the sale or convertibility of USDC, the stablecoin linked 1:1 to the US dollar. As a result, the USDC dropped to $0.90 early on Saturday. With USD 41 billion in circulation, this means a $4 billion unrealized loss. Circle, Coinbase’s parent company, acknowledged on Saturday that it had $3.3 billion in reserves at SVB that it could not withdraw on Thursday. This issue raises a new question about the viability of the stablecoin model.
At the very least, readers should take advantage of this chance to assess if their banks are secure and where they may face unforeseen threats. Yet that is insufficient. Human nature and psychology are often as much to blame for banking crises as asset and liability mismatches. If investors and depositors acquire confidence in the coming days that the problems at SVB were bank-specific, this storm may subside. Fear, on the other hand, is a highly contagious virus. If a bigger panic breaks out, we could be in for a terrifying banking and financial markets disaster. Keep an eye on this one over the next several days.
Another instance of elitist excess Every executive who sold shares for millions of dollars and received bonuses should be sued and held accountable. With 97% of accounts holding more than $250K in deposits (which are not insured), taxpayers should NOT bail them out.
We’re going to have to bail these jerks out. More of our hard-earned money is being used to cover up crooks.
Say hello to Granite Ridge Soapworks! Use our handmade soaps to take good care of your skin. Our premium natural ingredients work together to create a silky, creamy lather that hydrates your skin. Chemicals, such as sodium lauryl sulfate, phthalates, parabens, or detergents, are never used by us. To ensure quality, we make all of our soaps in modest quantities. Visit our Etsy store right away to give them a try and the attention your skin deserves. GraniteRidgeSoapworks: Because only the best will do for your skin.
Support The 127.org
One Orphans’s Story
A Thrilling Ride
Every once in awhile, a book comes across your path that is impossible to put down. A Long Journey Home is not a casual book that you read in a week or earmark to complete at a later date. Once you begin, cancel your schedule, put your phone on silent, find a quiet place where you cannot be disturbed, and complete the journey. Click Here to Purchase on Amazon.com!
Watchman: Why Does the Way of the Wicked Prosper? It Is Easy to Look At Our World Today and Wonder–Like the Biblical Prophet Jeremiah Did – Why Do the Wicked Prosper?
By StevieRay Hansen | November 13, 2023
The Realm of Commerce, the Private Sectors Possess the Remarkable Ability to Generate and Cultivate Wealth. In a World Where Resources Flow Like a River, … Read More →
The Domestic and Global Elites’ WAR on Patriotic American Citizens has now been fully unleashed.
By Dinesh Kaushiva | November 13, 2023
Dinesh Kaushiva November 13, 2023 We all have heard of these terms ; Democracy, Oligarchy, Monarchy, to describe types of Governments or Powerful Entities but … Read More →
Watchman Reports The U.N. Is A Satanic Extreme Viciousness Organization of Bloodsucking “disgraceful” LowLife Demon-Like Subhuman Monsters–Tribulation In Full Display
By StevieRay Hansen | November 13, 2023
HNewsWire: By canucklaw.ca A few weeks ago, British Columbia Bill 31, the Emergency and Disaster Management Act, made ripples because of the embedded language … Read More →
Watchman Take Note of Food Lines in America: This Level of Idiocy Is Real! Without a Doubt, the Government Will Handle This Issue With Its Typical Flair-That Is, by Making It Worse
By StevieRay Hansen | November 13, 2023
HNewsWire: In an effort to address what they see as the region’s rising food insecurity problem, the Los Angeles County Board of Supervisors overwhelmingly adopted … Read More →
Watchman: Daily Devotional, COVID-19: Is It Mentioned in Bible Prophecy? Bible Prophecy, in Fact, Does Mention Deadly Viruses or Pestilences and Crazy Men That Want To be GOD
By StevieRay Hansen | November 13, 2023
Jesus speaks of the future In Luke chapter 21, Jesus speaks prophetically about the signs that would precede the end of the world. In Luke … Read More →
Watchman: Lawlessness Will Abound in the Days Ahead, It’s Fair to Say That This Country’s People Are on Their Own, All Hell Is About to Break Loose …
By StevieRay Hansen | November 13, 2023
” Stay Home’: Feds Tell San Francisco Workers To Telecommute Due To Crime Wave by Tyler Durden Tuesday, Aug 15, 2023 – 07:05 PM Crime … Read More →
Reach 250K / Month
Subscribe At The Bottom Of This Pag
