This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

JPMorgan, U.S. Bancorp Grow as Banks Fail

Stocks in this article: JPM BBT USB

BOSTON ( TheStreet) -- JPMorgan Chase (JPM), U.S. Bancorp (USB) and eight other holding companies have boosted their deposits by more than a third in the past two years by acquiring failed banks.

With the Federal Deposit Insurance Corp. offering generous deals for acquirers of failed banks, holding companies of all sizes are emerging as big winners from the credit crisis. In addition to the Troubled Assets Relief Program, or TARP, which propped up hundreds of banks with capital infusions from the government, FDIC agreements buffer acquirers from losses on bad loans and prevent the widespread withdrawals that hobbled failed banks.

The FDIC has increased insurance limits on individual deposits to $250,000 through 2013 and waived all caps for business checking accounts until June 30. For acquiring companies, the regulator agreed to cover 80% of losses from commercial loans for five years and 80% of residential-loan losses for 10 years. The FDIC will reimburse 95% of losses that exceed agreed-upon thresholds.

Acquisitions of Failed Banks Boost Deposits
- Sep. 30 ($Mil)
Company City Domestic Deposits 2-year Deposit Growth Total Assets
JPMorgan Chase (JPM) New York $610,683 30% $2,041,009
U.S. Bancorp (USB) Minneapolis, Minn. $154,051 36% $265,058
BB&T Corp. (BBT) Winston-Salem, N.C. $110,912 38% $165,329
Zions Bancorporation (ZION) Salt Lake City $40,997 24% $53,425
First Citizens Bancshares (FCNCA) Raleigh, N.C. $15,349 18% $18,513
MB Financial (MBFI) Chicago $11,430 95% $14,135
East West Bancorp (EWBC) Pasadena, Calif. $8,425 13% $12,486
Prosperity Bancshares (PRSP) Houston $7,119 48% $8,961
First Citizens Bancorp (FCBN) Columbia, S.C. $7,013 42% $8,336
First Financial Bancorp (FFBC) Cincinnati, Ohio $5,836 105% $7,260
Iberiabank (IBKC) Lafayette, La. $4,776 38% $6,467
PacWest Bancorp (PACW) San Diego $4,049 17% $5,481
CVB Financial (CVBF) Ontario, Calif $4,040 18% $6,547
Westamerica Bancorp (WABC) San Rafael, Calif $4,028 21% $4,970
First Bancorp (FBNC) Troy, N.C. $2,923 61% $3,530
Great Southern Bancorp (GSBC) Springfield, Mo. $2,743 54% $3,728
First Financial Holdings (FFCH) Charleston, S.C. $2,428 29% $3,481
TIB Financial (TIBB) Naples, Fla. $1,335 31% $1,721
First California Financial (FCAL) Westlake Village, Calif $1,125 47% $1,470
Stonegate Bank Fort Lauderdale, Fla. $361 92% $466
Source: Regulatory data from consolidated financial statements for bank holding companies (FR Y-9C) provided by SNL Financial.

Data for First Financial Holdings comes from the Thrift Financial Report for main subisidiary First Federal FS&LA.

Data for Stonegate Bank comes from the institution's regulatory call report.

When you factor in the loss-sharing agreements with the minimal premiums paid by acquirers, banks are staring at a rare opportunity to increase deposits with limited risk and the possibility of a big payoff years later. As a result, the FDIC has found buyers for most failed banks.

The three largest acquirers on the list -- JPMorgan, U.S. Bancorp and BB&T (BBT) -- have increased deposits by more 30% during the past two years. All three have improved their net interest margins and repaid TARP funds. Despite the run-up in bank stocks since the S&P 500 Financials bottomed on March 6, these companies could rise further when the economy recovers.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs