To think I once even thought about putting a deposit in there. I have mine online with HSBC & ING. I hope those are safe locations seeing as they are both HUGE banks.
I wouldn’t call it a big deal. This is like a pimple on the butt of an elephant in the banking world. Netbank is a publicly traded company (on the Pinksheets) with a market cap under $4 million. A local community bank in Podunk, Iowa would be worth more than that.
I had an account with them back in 2004. I opened it to get airline miles (AA or UA, can’t remember). It was a good deal (the miles), and service was reasonably good. I closed the account a few months later once the promotional miles were safely stored in my airline frequent traveler account.
“NetBank had $109 million in deposit accounts that exceeded the FDIC limit. Those customers will become creditors in NetBank’s receivership, the FDIC said
I don’t know… maybe its because I’m three beers into a six pack but this sounds like really bad news. I think things are going to get really ugly much faster than we thought.
Someone explain to me please: NetBank was never known for its strength or longevity. Why would anyone keep more than FDIC limits there? You would think anyone who handles 6-figure cash has more brains than that, right?
Folks, this serious. This happened w/out so much as a peep out of the MSM. There isn’t even time for a bank run. I know I didn’t hear anything about this altough I suppose that if I were monitoring the stock I would have known something was up.
It really is serious and the way they announced after the market closed and on a Friday nite to avoid media exposure is just unbelieveable. Of course no one on this site cares. If it isnt in Chula Vista or Poway, don’t waste your time!
You’re right on about the seriousness of this. But I do think posters here are starting to see the big picture. I’m seeing more posts about this than I used to
The wikipedia article on this company suggests they were on shaky ground to begin with, so I don’t think this story means much in and of itself.
I do think, however, that it is a good example how being over-exposed to the real estate market is going to push many marginal businesses into bankruptcy over the next few years.
I doubt they’ll get much on the recovery. What is a dead bank worth that owns a bunch of bad mortgages?
The mortgages would also get liquidated by the FDIC at a discount price as well, this will likely kill any equity that could be left over if the fees for all this don’t take the rest. I suppose the good news is that whoever takes over the mortgages will be able to take on short sales and REO action as they’ll own the paper at 50 cents on the dollar.
This entire situation could start playing out more and more. Should be interesting.
It is significant. It was brought down by their mortgage exposure. The weak fall first. Many more will come. Did you folks not see what happened in England with Northern ROck recently!?!?! What about the two banks in Germany that had to be rescued. Big deals all. Don’t sweep this under the rug/
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