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Community Banks Can Become Disaster Relief Centers
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To assist Gulf Coast residents recovering from Hurricane
Gustav or other storms, community banks can become national disaster
relief donation sites through an ICBA partnership program with the
American Red Cross. The Your Help Counts program
serves as a national registration center for community banks to become
official American Red Cross donation sites for their customers and
communities.
Donations through the program support the American Red Cross Disaster
Relief Fund, which provides immediate help for Americans affected
by any natural disaster, whether from Hurricane Gustav
or possibly Hurricane Hanna now approaching Florida. The National
Oceanic and Atmospheric Administration is predicting an "above
normal" hurricane season in the Atlantic this year. See ICBA Crisis Preparedness
Resources. See FEMA Site.
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Georgia Bank Shut, All Deposits
Protected
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Integrity Bank in Alpharetta, Ga., with $1.1 billion in
assets and $974 million in deposits, was closed Friday by the Georgia
Department of Banking and Finance, and the FDIC was named receiver. The
failure could cost to the Deposit Insurance Fund as much as $350
million, the FDIC estimated.
Regions Bank in Birmingham, Ala., assumed all of Integrity Bank's
deposit accounts. All depositors of Integrity Bank, including those
with deposits in excess of the FDIC's insurance limits, will are
protected for the full amount of their deposits. Those depositors
continued to have uninterrupted access to their money. The bank failure
is the 10th this year.
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Fed Releases Refinancing Resource
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The Federal Reserve Board launched an online resource to
help consumers make informed choices when refinancing a home loan. A Consumer's Guide to Mortgage
Refinancing contains tips and answers to frequently asked questions
about the refinancing process.
The information provided can help consumers determine when refinancing
makes sense, what refinancing will cost, and whether it is advisable to
switch into a different type of mortgage. ICBA offers a variety of financial literacy resources
community bankers can use to help customers get the information they
need on home mortgages, identity theft and other issues.
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Thrifts Post Loss, Record Reserves
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Savings institutions lost $5.4 billion during second
quarter 2008 and set aside record reserves for loan losses, according to the Office of
Thrift Supervision. Thrifts set aside $14 billion in loan-loss
provisions to cushion against the continued housing market downturn.
Over the past year, savings institutions added more than $30 billion in
reserves, decreasing earnings but providing protections against loan
delinquencies and other problem assets. The second-quarter loss was the
second largest on record, following the $8.8 billion loss in fourth
quarter 2007.
More than 98 percent of the industry exceeded the standard for being
well-capitalized. The number of "problem thrifts" rose to 17
from 12 in the previous quarter.
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FDIC Announces Earnings, DIF Plans
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The FDIC said insured financial
institutions reported quarterly earnings of $5 billion in second
quarter 2008, and it announced plans for a Deposit Insurance Fund
restoration. The DIF reserve ratio fell to 1.01 percent from 1.19
percent the previous quarter, requiring an FDIC plan to replenish the
ratio to at least 1.15 percent within five years. The fund fell to
$45.2 billion from $52.8 billion due to failures at IndyMac Bancorp and
other banks.
Chairman Sheila
Bair said institutions that engage in high-risk behavior will shoulder
a greater share of premium increases under the restoration plan. In a
previous comment letter to the
agency, ICBA urged the FDIC to gradually recapitalize the fund over
three to five years without precipitous premium hikes.
Insured banks and savings institutions reported a $31.8 billion decline
in net income from second quarter 2007, an 86.5 percent drop. The FDIC
said the size of the earnings decline was largely due to a few large
institutions, though more than half of all insured institutions
reported lower income.
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