The current economic environment continues to take a toll on financial firms, with some raising capital to offset losses, others merging with healthier organizations and still others warning that they may not survive.
But first, the Federal Reserve Board on Wednesday announced the termination of an Oct. 12, 2005, written agreement with Deutsche Bank Trust Company Americas.
An analysis by the Charlotte Observer found that Bank of America Corp. has paid $746 million in fines and restitutions since 2004 — though $515 million of the total was from a single settlement related to FleetBoston. Wachovia Corp. was found to have paid $260 in fines and restitutions. Both banks are based in Charlotte, N.C.
Second-quarter net earnings at Morgan Stanley were $1.0 billion, falling from $1.5 billion in the first quarter and $2.6 billion a year earlier, its earning report yesterday said. Earnings were impacted by net losses of $436 million in mortgage proprietary trading.
Fifth Third Bancorp announced Wednesday a number of moves to shore up capital “in light of continued deterioration in credit trends during the second quarter of 2008 and its view that conditions are unlikely to improve in the near-term.”
The Cincinnati-based bank said it plans to issue $1 billion in convertible preferred shares, reduce its second quarter dividend to $0.15 per share form the first quarter’s $0.44 per share and sell non-core businesses over the next several quarters.
“We expect these actions to enable us to weather further depreciation in home prices as well as a significant weakening in economic activity relative to current levels,” Fifth Third President and Chief Executive Officer Kevin T. Kabat said in the press release.
Thornburg Mortgage Inc.was served with subpoenas by the Securities and Exchange Commission on April 24 and May 23 for documents related to an investigation related to its 2007 restatement, margin calls tied to reverse repurchase agreements and related disclosures, and its accounting treatment for mortgage-backed securities addressed in the restatement.
The Santa Fe, N.M.-based real estate investment trust warned in the filing about a number of conditions that must be met in connection with a recent financing transaction and said, “The uncertainty as to the outcome of these events, the available sources of liquidity and the availability of financing for certain of the company’s ARM Assets subsequent to the term of the override agreement continue to raise substantial doubt about the company’s ability to continue as a going concern for the foreseeable future.”
Solera National Bank, a community commercial bank based in Lakewood, Colo., announced a joint marketing agreement with Countrywide Home Loans. The strategic partnership calls for Countrywide to establish an office in each of Solera’s existing and future branch locations. Solera focuses on the Hispanic community.
Kaiperm Federal Credit Union has fallen victim to the credit crisis. The Oakland, Calif.-based organization, founded 50 years ago, announced it will merge with Alliant Credit Union. The move follows a first-quarter loss of $2.2 million. The credit union’s membership includes employees, their family members and health plan members of the Kaiser Foundation Medical Care Program.
