The final form of the financial system reform measure in Congress isn’t known, but large bank stocks rallied today on the belief that the reform measure will allow banks to continue to bet against their customers with up to 3 percent of their assets in securities markets and hedge funds. The 3 percent limit would appear to affect only Goldman Sachs, which presumably would be forced to spin off its banking business. The ability to place bets in securities markets is important to large banks, which have collectively lost money from banking operations over the past year, but have made a profit in the stock market.
The banking bust in southwest Florida continues, with Peninsula Bank failing tonight, and perhaps four more banks in the area that are considered financially empty at this point. Peninsula Bank was based in Englewood, Florida, and had six locations along the southwest coast of Florida, though it also had seven locations along the state’s southeast coast. It had $580 million in deposits.
Premier American Bank is taking over the deposits and purchasing the assets.
Banks also failed tonight in Georgia and New Mexico. In Georgia, Savannah-based First National Bank failed. It had four locations and $232 million in deposits. The Savannah Bank is taking over the deposits and purchasing the assets. It is paying a token premium for the deposits.
In New Mexico, the failed bank was High Desert State Bank, with its two locations in Albuquerque and Rio Rancho. It had $81 million in deposits and a similar amount in assets. The successor is First American Bank.
