When Wells Fargo held its annual meeting this week, it took the unusual move of barring individual shareholders from the meeting. Invited institutional shareholders and company employees (who presumably were shareholders themselves and not merely posing as such) were admitted, and a few public shareholders managed to sneak in, but ordinary shareholders were kept out by building security and police. The company wanted to avoid a repeat of last year’s meeting, when a handful of shareholders voiced disagreement with the company’s foreclosure policies. Barring shareholders from attending the annual meeting of a corporation is a calculated risk, however, as a court could decide to annul the meeting, forcing the corporation to hold it all over again.
Spain is scrambling after the country was downgraded this week. The country was already facing record unemployment, 24 percent overall and over 50 percent among younger workers. There are worries about loan losses at the banks because of the country’s economic decline. The government will probably have to respond with a combination of wage cuts and tax increases.
Five banks failed tonight with a total of $1.3 billion in deposits.
In Minnesota: InterBank, with four branches spread around the outer suburbs of Minneapolis. The failed bank had been accused of failing to disclose the condition of bad mortgages it sold. It had recorded losses of $40 million over the last three years.
Missouri-based Great Southern Bank is taking over the deposits and purchasing the assets.
In South Carolina: Plantation Federal Bank, with 4 locations in the state’s shore towns and 2 more in Greenville, in the hills at the opposite end of the state. The bank’s holding company issued an apologetic statement after the closing, noting the economic pressures on borrowers. Charleston-based First Federal Bank is taking over the deposits and purchasing the assets.
In Maryland: HarVest Bank of Maryland and Bank of the Eastern Shore. HarVest Bank of Maryland had four branches in the northern suburbs of Washington, DC, along Interstate 270. The bank had spent the last year trying to raise capital, but one deal after another fell through. Virginia-based Sonabank is taking over the deposits and purchasing the assets.
The FDIC created a bridge bank to operate the branches of Bank of the Eastern Shore. The FDIC has transferred checking and savings accounts to the bridge bank so that depositors can withdraw their funds and transfer them to other banks. The bridge bank will operate for four weeks, but depositors should start on Monday to make other banking arrangements. The FDIC will mail checks to the owners of CD and IRA accounts for the amount of their insured deposits. The FDIC will retain all assets of the failed bank for now.
In California: Palm Desert National Bank, with a single location. It is the first California bank to fail this year. Pacific Premier Bank is taking over the deposits and purchasing the assets, one year after its acquisition of the failed Canyon National Bank nearby. The FDIC will not share in the losses from the assets of Palm Desert National Bank.