Moody’s issued warnings on downgrades to three of the largest U.S. banks, suggesting that their profitability and liquidity depended on recurring federal bailouts, which it believes the federal government is no longer politically able to provide. Separately, Moody’s warned on a downgrade to the U.S. government if Congress does not act soon to take the government out of its current bankrupt state, with debts exceeding the statutory debt ceiling.
Some details of a new Greece bailout deal have emerged since yesterday. The new bailout sum, said to be less than $20 billion, is not really large enough to solve Greece’s problems. Instead, it is mainly intended to provide political cover for the government’s latest austerity program. Officials at the European Central Bank are particularly determined to keep Greece afloat. Large banks across Europe hold so much Greece debt that a default would likely require a new wave of bank bailouts.
In South Carolina, Atlantic Bank and Trust failed tonight. The bank had $192 million in deposits and three locations in Charleston and Myrtle Beach in South Carolina and across the river in Savannah, Georgia. It had been operating under a cease and desist order from the OTS since January 25.
Atlantic Bank and Trust launched quietly in 2007 with a plan that called for a small branch network extending along the coast from Wilmington, North Carolina, to Jacksonville, Florida. The bank emphasized home mortgage and commercial real estate loans from the start, and those categories were falling apart just as the bank was opening its doors.
The deposits were transferred to First Citizens Bank, which is also purchasing the assets.