Flying under the radar two more U.S. banks have officially collapsed this year, bringing the total to 6 so far.
One week ago today the Beverly Hills-based bank PacWest failed but agreed to be absorbed by smaller rival Banc of California (BoC), comprised of an all-stock deal. PacWest was under scrutiny since the fall of Silicon Valley Bank in March, and was predicted by some economists to collapse later this year.
We’re going to make sure that we look to avoid the concentration risks that I think all banks experienced over the last several years.
Banc of California CEO Jared Wolff told analysts on a call last week
Yahoo! Finance detailed some of the actions being taken:
Private equity groups Warburg Pincus and Centerview helped arrange $400 million in new equity from investors as part of the deal and would own roughly 20% of the combined bank. The pact is expected to close in late 2023 or early 2024, if it receives approvals from shareholders and regulators.
The union would create a $36 billion lender headquartered in Los Angeles under the Banc of California name, with more than 70 branches in California. It will be run by Banc of California CEO Jared Wolff and focus primarily on community banking in California markets.
Both banks serve wealthier customers in California, and PacWest is the far bigger lender when measured by assets. It was the nation’s 49th-largest bank as of March 31 by that measure, while Banc of California was the 135th largest.
But PacWest’s market value was just slightly higher at Tuesday’s close, $924 million as compared to Banc of California’s $842 million.
In the first week of May, PacWest disclosed it was exploring “strategic asset sales” to improve its supply of cash on hand to meet potential depositor withdrawals. This included a $2.7 billion sale of its lender finance loan portfolio.
Last month PacWest also sold a $3.5 billion portfolio of consumer loans, mortgages, and other assets to Ares Management.
On Tuesday it reported that it lost another $196 million in the first quarter, and its net interest income also shrank as its funding costs rose. Net interest income measures the difference between what banks earn on their loans and pay for their deposits.
Additionally, J.P. Morgan Chase enriched themselves some more from this collapse. Banking Dive reported ‘the nation’s largest bank has agreed to buy $1.8 billion of single-family residential loans from Banc of California at a discount. In a presentation discussing the acquisition BoC had engaged with a “contingent forward asset sale agreement” for its residential mortgage portfolio, but did not disclose who at the time.
Heartland Bank
More recently Heartland Tri-State Bank in Elkhart, Kansas, was seized by the FDIC. The federal agency said that ‘Dream First Bank, National Association (N.A.), Syracuse, KS assumed all deposit accounts and substantially all the assets. All shares of stock were owned by the holding company, which was not involved in this transaction.’
All deposit accounts, including brokered deposits, have been transferred to Dream First Bank, N.A., Syracuse, KS (“assuming institution”) and will be available immediately. The former Heartland Tri-State Bank locations will reopen as branches of Dream First Bank, N.A. during regular business hours.
All transferred deposits will be separately insured from any accounts you may already have at Dream First Bank, N.A. for at least six months after the failure of Heartland Tri-State Bank. Checks that were drawn on Heartland Tri-State Bank that did not clear before the institution closed will be honored as long as there are sufficient funds in the account.
Dream First Bank, N.A. will review deposit rates. You will be notified of any changes. You may withdraw your funds from any transferred account without an early withdrawal penalty until you enter into a new deposit agreement with Dream First Bank, N.A. as long as the deposits are not pledged as collateral for loans.
The FDIC stated
The Poplar Report and The Economic Ninja provided more commentary on this situation and what it all means. The two had predicted these collapses, and both have warned that the banking crisis never ended and is now primed to reaccelerate as the year rolls on.
Moreover, it is worth noting that after the four banks collapsed this year, that the amount of bailout money has already far exceeded the payouts during 2008 on the whole year. 2023 is a little more than halfway through and yet already greatly surpassed the Panic of ’08.
AUTHOR COMMENTARY
This hardly got traction in the media: they don’t want you to know the economy is totally destroyed and the worst is yet to come. The banking crisis is FAR from over.
As a matter of fact, we are going to see the worst and largest banking collapse never before seen coming in short order. These banks, from top to bottom, are insolvent and are going to collapse, thus requiring a bailout from the government (you and I) or they can eat dirt and you can watch your assets get fried.
Therefore you need to be de-banked and be your own, because things are going to get gnarly soon enough.
[7] Who goeth a warfare any time at his own charges? who planteth a vineyard, and eateth not of the fruit thereof? or who feedeth a flock, and eateth not of the milk of the flock? [8] Say I these things as a man? or saith not the law the same also? [9] For it is written in the law of Moses, Thou shalt not muzzle the mouth of the ox that treadeth out the corn. Doth God take care for oxen? [10] Or saith he it altogether for our sakes? For our sakes, no doubt, this is written: that he that ploweth should plow in hope; and that he that thresheth in hope should be partaker of his hope. (1 Corinthians 9:7-10).
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I can just feel the evil in the air, everything is going batcrap crazy. The KJV Bible has been telling the world this since 1611, yet only a few of us are taking heed to the Words of the LORD. If your not right with the Lord, I urge you to get right with God. Ask Jacob(Winepress news), KJVM(Bryan Denlinger) or even little ole me or any saved man, but please do it.