Quietly Raking It In From Failed Banks
But East West is far from the only bank to see a significant stock surge after doing a deal with the FDIC. Since mid-November, at least three other banks, IberiaBank (IBKC), City National Corp. (CYN) and Southern National Bancorp of Virginia (SONA), all saw one day gains of more than 15% after completing FDIC-assisted acquisitions.
And in December alone, banks that saw one-day stock price pops of at least 5% on Mondays after buying failed banks on the previous Friday include 1st United Bancorp (FUBC), Heritage Financial Group (HBOS), New York Community Bancorp (NYB) and MB Financial (MBFI).
I have not been systematic about looking through all the deals and all the share price movements, so there are almost certainly several other examples I have missed. One thing is clear, though: a lot of people are already getting very rich off of this banking crisis. The IndyMac investors are not alone among the private winners. Another rich guy almost certainly getting a lot richer is Andy Beal, head of privately-held Beal Bank in Plano, Texas, which picked up its own little pre-Christmas gift from the FDIC on Friday in the form of New South Federal Savings Bank of Irondale, Alabama.
With most experts estimating hundreds more bank failures in 2010, FDIC chief Sheila Bair must be one popular lady these days. At least among bankers looking to strike it rich.-- Written by Dan Freed in New York.
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