Sterling Bank, it has just been announced, has received a 'cease and desist order,' which puts it on the list of banks likely to fail. Not immediately and not necessarily, but in sufficient danger that it must either raise new capital or be taken over by the FDIC. It's stock, not surprisingly, sank again today, down to the $1.40's this morning. The CEO has been replaced.
Update: "Customer deposit accounts and non-classified loans are unaffected by the agreement with regulators. Deposits remain fully covered by FDIC insurance to at least $250,000 per depositor. In addition, non-interest bearing transaction accounts and qualified NOW Checking accounts are fully guaranteed by the FDIC for an unlimited amount of coverage under the FDIC’s Transaction Account Guarantee (TAG) program, in which Sterling is a participant. The coverage under the TAG program is in addition to, and separate from, the coverage available under the FDIC’s general deposit insurance protection." More info on the nature of the agreement with the FDIC here
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2 comments:
Thank you for the alert. Any suggestions for concerned depositors at Sterling here in Point Roberts?
i think the blog update covers that with respect to depositors: accounts are insured by the FDIC so i don't think, as a depositor, i'd do anything. in fact, i am a depositor, and i don't intend to do anything. the reason the FDIC exists is to protect depositor funds and thus to keep depositors from trying to pull their funds out of a bank in trouble...because if the depositors do that, the bank will surely be in more trouble (a bank run, effectively). i'm interested in sterling's fate (i'm not a shareholder, just a depositor) not because I fear for my checking and savings accounts, but because it reflects, even in this tiny community, the wide scale of the current financial crisis in the country. even if we think the overall problem might not affect us, our community can be affected in various ways.
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