Failures That Couldn't Wait for Friday

May 22, 2013 12:37 PM

Regulators usually shut down banks on Friday nights to minimize disruption. However, no rule says failures have to occur on the sixth day of the week. Here is a look, in pictures, at noteworthy seizures on days other than Friday.

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The Big One

FAILED BANK: Washington Mutual, Seattle
ASSETS: $307 billion
DATE: Thursday, Sept. 25, 2008

WaMu was searching for a rescue, but nearly $17 billion in deposits were yanked in the ten days leading up to the seizure, straining liquidity. WaMu is the largest bank failure in U.S. history.

(Image: Bloomberg News)

Small Town, Big Fraud

FAILED BANK: First National Bank of Keystone (W.Va.)
ASSETS: $1.1 billion
DATE: Wednesday, Sept. 1, 1999

The now infamous bank in a West Virginia coal-mining town was a top performer before fraud involving the securitization of more than $500 million of the bank's loans brought it down. Several employees -- including Chairman Billie Cherry, who was also the town's former mayor -- went to prison.

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Subprime Panic

FAILED BANK: Miami Valley Bank (Lakeview, Ohio)
ASSETS: $87 million
DATE: Thursday, Oct. 4, 2007

Nervous depositors began yanking their cash en masse as the bank's subprime loans - which made up a third of its assets - soured.

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Jump-start on Summer

FAILED BANK: BankUnited, Coral Gables, Fla.
ASSETS: $12.8 billion
DATE: Thursday, May 21, 2009

Regulators closed the south Florida lender on Thursday with an eye toward depositor convenience. The private-equity buyers, led by John Kanas, reopened on Friday, the eve of the Memorial Day weekend. The newly formed bank kept the name.

Related Article: BankUnited Failure to Cost $5B

(Image: Bloomberg News)

Honoring Faith

FAILED BANKS: LibertyPointe Bank (New York) /Public Savings Bank (Huntingdon Valley, Pa.)
ASSETS: $210 million / $47 million
DATE: Thursday, Aug. 18, 2011 / Thursday, March 11, 2010

Bank failures take a lot of work, so regulators closed these two banks in Orthodox Jewish communities on Thursdays to avoid the Jewish Sabbath, the day of rest that begins at sundown on Friday.

Related Article: Bank Failure Timed to Avoid Conflict

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Fireworks in Illinois and Texas

FAILED BANKS: Six bank units of Founders Group(Worth, Ill.,) / Millennium State Bank of Texas (Dallas)
ASSETS: $1.4 billion / $118 million
DATE: Thursday, July 2, 2009

Regulators chose Thursday in advance of Independence Day to close the Texas and Illinois banks. Shoddy investments brought down the six Founders units.

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Short Reprieve

FAILED BANK: Central Arizona Bank
ASSETS: $32 million
DATE: Tuesday, May 14

Capitol Bancorp, led by Joseph Reid, attempted to prevent the seizure of one of its Arizona banks by filing an injunction. The move bought it three days.