Saturday, December 18, 2010

One Remedy to U.S. Bank Failures

According to the FDIC, as of December 17, 2010, a total of 163 banks have failed this year. Some banks were merged with larger banks, some banks never recovered and will never reopen, some banks were bought by the government and some banks were bought by other countries.

The Bank of Montreal located in Canada recently purchased the Marshall & Ilsley's bank for $4.1 billion in stock. The bank began in 1847 and is headquartered in Wisconsin. The bank has 53 locations in Arizona; 192 in Wisconsin, 33 in central Indiana, Indianapolis; 36 in west coast and central Florida; 15 in Kansas City; 26 offices in metropolitan Minneapolis and St. Paul, one in Duluth, Minnesota, 17 in greater St. Louis Minnesota; and one in Las Vegas, Nevada. The Bank of Montreal purchased Amcore Bank in Rockford, Illinois in April 2010.

Marshall & Ilsley participated in the government’s Troubled Asset Relief Program (TARP). The Bank of Montreal purchased their TARP preferred shares and plans to repay them in full before the acquisition closes. Marshall & Ilsley offers personal banking as well as investment management, mortgage banking, investment, insurance, equipment leasing and financial planning services.

The Bank of Montreal previously paid $375 million for the Canadian life insurance business of American International Group Inc. (AIG). The Bank of Montreal is the parent company of Harris Bank based in Chicago Illinois.

Canadian banks have been ranked the soundest in the world and have done much better than banks in other countries. Toronto-Dominion Bank (TD Bank) which is ranked as Canada's second largest bank, purchased New Jersey based Bancorp and the South Carolina based bank South Financial Group. TD Bank also agreed to buy the assets of three bankrupt banks: AmericanFirst Bank, Riverside National Bank of Florida and First Federal Bank of North Florida.

The U.S. Bank, TD Ameritrade Holding Corp. is owned 40% by TD Bank. In September 2010, TD Bank purchased South Financial Group Inc. bank in Greenville, South Carolina. It also purchased 2 other failed banks this year: Carolina First located in North Carolina and South Carolina and Mercantile Bank located in Florida. TD Bank previously purchased Bancorp located in Cherry Hill New Jersey and Banknorth located in Portland Maine.

The Royal Bank of Canada is the largest bank in Canada and also owns the RBC Bank in the US (formerly called RBC Centura) that has branches in Alabama, Georgia, North Carolina, Florida, South Carolina and Virginia. The Royal Bank of Canada (RBC) previously purchased Alabama National Bancorp bank, The Eagle Bancshares, Admiralty Bancorp and AmSouth bank branches.

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