U.S. Fed Restricts Bank Holding Companies

George Ure at UrbanSurvival points out an oddity this morning.  A fluury flury of agreements between the Federal Reserve and bank holding companies are taking place with no reason given.  Is this a way to thwart a takeover and draining of the FDIC?

Ure lists the following banks WGNB, a bank holding company in Georgia, or Leawood Bancshares of Kansas, or Rogers Bancshares of Arkansas, and Coastal Community Investments of Florida.  I’ve found two others, Crescent Banking Co. of Jasper, Ga. and FCB Financial Inc

WGNB, a publicly traded company with over 6 million shares outstanding and about $900 million in assets, “… is restricted from paying dividends, buying/redeeming shares of its stock or accruing additional debt without prior consent of the Federal Reserve Bank of Atlanta and banking commissioner of Georgia.”  All the banks agreed to the same restrictions.  Crescent Banking is publicly traded with over 5 million shares outstanding with over $1 billion in assets.

It would appear the shareholders are stuck.  They can’t sell on a open market, the company can’t buy the shares and the bank is restricted by the FED.

In another development, I didn;t realize that the FED was involved with CIT Group until I read,

CIT agreed to submit a written plan to the Federal Reserve Bank of New York, outlining how it will maintain sufficient capital both at its Utah-based bank and the bank holding company.

There are a whole list of banks that have signed written agreements with the FED.

One Response to “U.S. Fed Restricts Bank Holding Companies”

  1. Misspelled flurry…. ?fluury?

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