by John Galt
January 27, 2017 18:45 ET
For the terminally stupid, the headline is obviously sarcasm. But the reality is the Obama bank failure rush will begin now.
Tonight, President Donald J. Trump’s FDIC took the first step to stabilizing the corrupt Obama banking system by what?
Seizing a black owned bank with rumored political ties to Mayor Rahm Emmanuel and support for Democrat causes in the region. Political payback or just logical?
I’ll go for the latter as the Treasury Secretary nominee, Steve Mnuchin, has not even been confirmed yet and has no authority over this action since the FDIC is still under Obama appointee control. Nor has a new head for the FDIC even been announced. This bank failure is on Obama.
Thus the only conclusion is this bank must have really, really sucked as hinted by this article from Crain’s in Chicago:
Yeah, that’s from June 11, 2016. I guess it was doomed then but due to the election, it was delayed. From the article:
Seaway Bank & Trust is in the early stages of a capital-raising campaign that, if successful, could well threaten its status as the largest black-owned bank in the Midwest.
The South Side lender has suffered $16 million in total losses over the past five quarters ended March 31. Its capital is below the minimum needed for the bank to be deemed “adequately capitalized” by regulators. To prop it up and enable it to lend actively, Seaway is preparing to select an investment banker to raise what one source says would be more than $15 million in fresh capital.
In an email, a spokeswoman acknowledges the need for cash but won’t comment on the amount sought. “Seaway is currently engaging investment bankers for a capital raise,” she says. “We remain committed to our mission and our markets.”
The bank also remains without a CEO since the departure in September of Darrell Jackson, who led Seaway for only a year before his exit. Executive Chairman Veranda Dickens, who has been in charge since the 2013 death of her husband, longtime Seaway owner and Chairman Jacoby Dickens, “is managing day-to-day operations of the bank,” the spokeswoman says. The CEO search “is ongoing and progressing well,” she adds.
Translation? It was doomed. And Trump had nothing to do with it. From the FDIC website:
January 27, 2017
Seaway Bank and Trust Company, Chicago, was closed today by the Illinois Department of Financial and Professional Regulation – Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with State Bank of Texas, Dallas, to assume all of the deposits of Seaway Bank and Trust Company.
The ten branches of Seaway Bank and Trust Company will reopen as branches of State Bank of Texas during their normal business hours. Depositors of Seaway Bank and Trust Company will automatically become depositors of State Bank of Texas. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Seaway Bank and Trust Company should continue to use their existing branch until they receive notice from State Bank of Texas that it has completed systems changes to allow other State Bank of Texas branches to process their accounts, as well.
This evening and over the weekend, depositors of Seaway Bank and Trust Company can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of September 30, 2016, Seaway Bank and Trust Company had approximately $361.2 million in total assets and $307.1 million in total deposits. In addition to assuming all of the deposits of the failed bank, State Bank of Texas agreed to purchase $309.0 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.
Customers with questions about the transaction should call the FDIC toll-free at 1-800-930-5169. The phone number will be operational this evening until 9 p.m., Central Time (CT); on Saturday from 9 a.m. to 6 p.m., CT; on Sunday from noon to 6 p.m., CT; on Monday from 8 a.m. to 8 p.m., CT; and thereafter from 9 a.m. to 5 p.m., CT. Interested parties also can visit the FDIC’s website at https://www.fdic.gov/bank/individual/failed/seaway.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $57.2 million. Compared to other alternatives, State Bank of Texas’s acquisition was the least costly resolution for the FDIC’s DIF. Seaway Bank and Trust Company is the second FDIC-insured institution to fail in the nation this year, and the first in Illinois. The last FDIC-insured institution closed in the state was Edgebrook Bank, Chicago, on May 8, 2015.
I just wonder how many other banks that Obama’s regime protected will get zapped by the FDIC once Trump assumes full control. It could get ugly…