Kicking Over My Traces

After yesterday’s pre-holiday bad news dump from the FDIC,* I thought it wise to check back for a July update on the St. Louis Fed’s money supply graph. (June’s update was prompted by a story in the Wall Street Journal.)

Here’s the skyrocket:

This sort of firecracker should be outlawed ahead of bottle rockets, cherry bombs and hand grenades. It’ll cause more harm than all the poppers shot off across the country for the next fifty years.

The good news from the data is that the money supply is down to $1.6 trillion from its all time high of $1.8 trillion.

The bad news is that the huge spike did nothing — or next to nothing — to turn the economy around. (See yesterday’s unemployment statistics for a strong argument against “green shoots” sprouting in the economy.)

There are two possible outcomes.

The money supply could maintain its high level. That means explosive inflation.

The money supply could drop faster than that Airbus that crashed into the Atlantic like a brick.

Both outcomes call for prolonged period of picking up the economic pieces.

(No, I don’t see a soft landing — especially should Democrats succeed in pushing through Cap’n Trade, Obamacare or another so-called stimulus. I will cheerfully admit error if events prove me wrong.)

Somebody failed to get all their ducks in a row in Illinois:

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The First State Bank of Winchester, Winchester, Illinois, 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 The First National Bank of Beardstown, Beardstown, Illinois, to assume all of the deposits of The First State Bank of Winchester.

The two offices of The First State Bank of Winchester will reopen on Monday as branches of The First National Bank of Beardstown. Depositors of The First State Bank of Winchester will automatically become depositors of The First National Bank of Beardstown. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until The First National Bank of Beardstown can fully integrate the deposit records of The First State Bank of Winchester.

Over the weekend, depositors of The First State Bank of Winchester 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 April 30, 2009, The First State Bank of Winchester had total assets of $36 million and total deposits of approximately $34 million. The First National Bank of Beardstown paid a premium of 2.0 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, The First National Bank of Beardstown agreed to purchase approximately $33 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and The First National Bank of Beardstown entered into a loss-share transaction on approximately $20 million of The First State Bank of Winchester’s assets. The First National Bank of Beardstown will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-331-6306. The phone number will be operational this evening until 9:00 p.m., Central Daylight Time (CDT); on Friday and Saturday from 9:00 a.m. to 6:00 p.m., CDT; on Sunday from noon to 6:00 p.m., CDT; and thereafter from 8:00 a.m. to 8:00 p.m., CDT. Interested parties can also visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/winchester.html.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $6 million. The First National Bank of Beardstown’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to alternatives. The First State Bank of Winchester is the 47th FDIC-insured institution to fail in the nation this year, and the eighth in Illinois. The last FDIC-insured institution to be closed in the state was The John Warner Bank, earlier today.

Illinois got steamrolled today:

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The John Warner Bank, Clinton, Illinois, 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 Lincoln, Lincoln, Illinois, to assume all of the deposits of The John Warner Bank.

The three offices of The John Warner Bank will reopen on Friday as branches of State Bank of Lincoln. Depositors of The John Warner Bank will automatically become depositors of State Bank of Lincoln. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until State Bank of Lincoln can fully integrate the deposit records of The John Warner Bank. Depositors of The John Warner Bank 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 April 30, 2009, The John Warner Bank had total assets of $70 million and total deposits of approximately $64 million. State Bank of Lincoln paid a premium of 4.1 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, State Bank of Lincoln agreed to purchase approximately $63 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and State Bank of Lincoln entered into a loss-share transaction on approximately $31 million of The John Warner Bank’s assets. State Bank of Lincoln will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-837-0215. The phone number will be operational this evening until 9:00 p.m., Central Daylight Time (CDT); on Friday and Saturday from 9:00 a.m. to 6:00 p.m., CDT; on Sunday from noon to 6:00 p.m., CDT; and thereafter from 8:00 a.m. to 8:00 p.m., CDT. Interested parties can also visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/warner.html.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $10 million. State Bank of Lincoln’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to alternatives. The John Warner Bank is the 46th FDIC-insured institution to fail in the nation this year, and the seventh in Illinois. The last FDIC-insured institution to be closed in the state was Bank of Lincolnwood, Lincolnwood, on June 5, 2009.

A patch of rough water in Illinois:

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Rock River Bank, Oregon, Illinois, 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 The Harvard State Bank, Harvard, Illinois, to assume all of the deposits of Rock River Bank.

The four offices of Rock River Bank will reopen on Monday as branches of The Harvard State Bank. Depositors of Rock River Bank will automatically become depositors of The Harvard State Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until The Harvard State Bank can fully integrate the deposit records of Rock River Bank.

Over the weekend, depositors of Rock River Bank 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 April 30, 2009, Rock River Bank had total assets of $77 million and total deposits of approximately $75.8 million. The Harvard State Bank paid a premium of 2.0 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, The Harvard State Bank agreed to purchase approximately $72.9 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and The Harvard State Bank entered into a loss-share transaction on approximately $51.3 million of Rock River Bank’s assets. The Harvard State Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-591-2903. The phone number will be operational this evening until 9:00 p.m., Central Daylight Time (CDT); on Friday and Saturday from 9:00 a.m. to 6:00 p.m., CDT; on Sunday from noon to 6:00 p.m., CDT; and thereafter from 8:00 a.m. to 8:00 p.m., CDT. Interested parties can also visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/rockriver.html.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $27.6 million. The Harvard State Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to alternatives. Rock River Bank is the 48th FDIC-insured institution to fail in the nation this year, and the ninth in Illinois. The last FDIC-insured institution to be closed in the state was The First State Bank of Winchester, earlier today.

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• FDIC Closes Bank of Lincolnwood in Lincolnwood, IL (cehwiedel.com)

More thorns than roses in Illinois:

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The Elizabeth State Bank, Elizabeth, Illinois, 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 Galena State Bank and Trust, Galena, Illinois, to assume all of the deposits of The Elizabeth State Bank.

The two offices of The Elizabeth State Bank will reopen on Monday as branches of Galena State Bank and Trust. Depositors of The Elizabeth State Bank will automatically become depositors of Galena State Bank and Trust. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branches until Galena State Bank and Trust can fully integrate the deposit records of The Elizabeth State Bank.

Over the weekend, depositors of The Elizabeth State Bank 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 April 30, 3009, The Elizabeth State Bank had total assets of $55.5 million and total deposits of approximately $50.4 million. Galena State Bank and Trust paid a premium of 1.0 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, Galena State Bank and Trust agreed to purchase approximately $52.3 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and Galena State Bank and Trust entered into a loss-share transaction on approximately $44.5 million of The Elizabeth State Bank’s assets. Galena State Bank and Trust will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-591-2820. The phone number will be operational this evening until 9:00 p.m., Central Daylight Time (CDT); on Friday and Saturday from 9:00 a.m. to 6:00 p.m., CDT; on Sunday from noon to 6:00 p.m., CDT; and thereafter from 8:00 a.m. to 8:00 p.m., CDT. Interested parties can also visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/elizabeth.html.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $11.2 million. Galena State Bank and Trust’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to alternatives. The Elizabeth State Bank is the 49th FDIC-insured institution to fail in the nation this year, and the tenth in Illinois. The last FDIC-insured institution to be closed in the state was Rock River Bank, Oregon, earlier today.