People’s United customers have endured long waits at branch offices, inability to access their accounts, ridiculously long hold times when calling the bank, and a litany of other problems.  Despite the  misery, confusion, and huge amounts of wasted time for customers, M&T has served up nothing but a cold dish of excuses for recompense.

M&T Bank would not even provide an answer to how many customers had serious problems with the merger – are they hiding the facts, or do they just not know?  Either way this is an unsatisfactory response.  In addition, Bank Spokesman Mike Keagan said that recompense for customers impacted financially would be looked at on a “case by case basis”.  My translation of this response to customers is “no, we don’t care” – please prove me wrong.

From the Connecticut Insider

The office of the state’s attorney general is looking into concerns related to the conversion of People’s United bank accounts to M&T Bank, labeling the preparatory work as a “serious lack of preparation” that left Connecticut customers in the lurch in paying bills on time through automated debit accounts.

Attorney General William Tong wrote to M&T Bank to “express deep concern regarding complaints my office has received from numerous consumers and employees” regarding the conversion. Complaints fielded by his office ranged from customers’ inability to access banking records and their own money to severed employees being “denied access to timely information regarding COBRA health benefits, severance payments, vacation payouts” and more.

“Connecticut customers wasted hours of time on hold and in branches trying to sort out problems that should have been addressed prior to the conversion,” Tong wrote M&T on Wednesday. “Should Connecticut consumers continue to experience extended gaps in customer service, my office will not hesitate to use the full extent of our authority to protect families and businesses.”

After acquiring Bridgeport-based People’s United Financial last April, M&T Bank converted People’s United systems to its own over the Labor Day weekend. Since then, customers have posted hundreds of complaints of problems with accessing their accounts through online channels, and long waits for help via call centers and in branches. One issue included those struggling to access their account due in part to a technical issue resulting from the use of special characters in account names.

“We haven’t been able to access our accounts since last Wednesday and I’m told that our ‘profile’ has totally disappeared, and we will have to open new accounts which may take a week or more,” stated Adrienne Farrar Houël, CEO of Greater Bridgeport Community Enterprises, in an email to CTInsider. “The manager calls the back office and has to hang on for more than an hour only to be told that they will call back or that she should call back. I’m still mad as hell and still don’t have our company accounts up and running.”

Pouring salt into the wounds of People’s United customers, the M&T CFO Darren King made this incomprehensibly stupefying remark on Wednesday at an investor conference: “the company is pleased with how things are going”.

Mr. Darren may change his tune once the Connecticut GA investigates this matter.

Aggrieved customers can file their complaints with the Connecticut Attorney General at attorney.general@ct.gov.

The post Problems for M&T/People’s Bank Merger Escalate as Connecticut Attorney General Gets Involved first appeared on Problem Bank List.

Vermont Biz

M&T Bank Corporation (NYSE: MTB) announced Saturday the successful completion of M&T’s acquisition of People’s United Financial, Inc. (NASDAQ: PBCT) valued at $8.3 billion. The combined company employs more than 22,000 people and has a network of over 1,000 branches and 2,200 ATMs that span 12 states from Maine to Virginia and Washington, DC.  People’s United common stock no longer trades on the NASDAQ after Friday, April 1, 2022.

The combined banks have assets of around $200 billion which puts them in the mid-size systematically unimportant category in the banking industry.

Whoever was responsible for the integration of systems between the two banks should be promptly fired.  The disaster that People’s United customers are enduring has to make customers wonder if they should just move their business to a new bank.

The problems have been so profound that the local news media has made it headline news.

Former People’s customers face long wait for service as M&T Bank takes over accounts

Luis Malave, 30, of Bridgeport, stopped by an M&T branch on Boston Avenue Wednesday to clear up an online banking issue with a deposit, only to encounter long lines of customers.

Malave ended up using an ATM inside the branch “just to save myself some time.”

“Today it’s really long,” Malave said, estimating that there were 15 people in line ahead of him.

Mike Keegan, M&T Bank’s executive vice president and head of community banking, said the company prepared almost 800 employees to answer questions from consumers. He said he is aware of customers experiencing long call wait times, which he called unacceptable.

“It’s not the customer service level we want to have or will have, but we’re getting there,” Keegan said. “It’s just unprecedented volume because change is happening, and people want to make sure that they’re comfortable with what’s going on.”

Note to Mike Keegan – the 800 employees were obviously not enough and it’s not that people are “uncomfortable” with the merger – it’s the fact that People’s customers can’t access their accounts.  M&T Bank sent People’s United customers numerous letters about the coming bank merger – the stack that I received was over an inch thick and I only have two accounts at People’s.  The messaging was overkill and totally confusing.  The M&T online and mobile web sites are obtuse and uniquely user unfriendly.

Most of the so-called help lines M&T set up have banking hours – sorry don’t call us past 5PM.  On September13, a full seven days after this misfire merger, the wait time for customer service is still two to three hours.  Is it just me or is it idiotic not to be able to leave a number and have a rep call back at their own convenience??

Naugatuck resident Mark Gillis, 66, told Hearst Connecticut Media that he is unable to log into his new personal and business M&T accounts. When he tried to log into his personal account, the system said that the username he typed didn’t match the Social Security number for his account, he said.

“I called the number that they had listed as if you’re having a problem with the personal accounts,” Gillis said. “I was told that it was a wait time of 25 minutes, or I could hold or I could ask for a callback, which I did.”

Over 30 hours later, he still hadn’t received that callback as of Wednesday evening.

The staff at People’s seemed equally frustrated.  Two days after the merger was completed a bank rep was unable to give me any information about my mortgage.  This is totally unacceptable and there is obviously a very serious problem with the inept and poorly done systems integration between the two banks.

This from the Hartford Courant.

M&T Bank after tumultuous first week since People’s United account merger: ‘We know we have some work to do’

“We want to make sure any disenfranchised customer gets a full acknowledgement of what we put them through, and get back on track and that we have a long-term relationship with them,” Mike Keegan, executive vice president and head of M&T’s community markets, said.

“I want people to know that when we don’t get it right, we will get it right,” Keegan said. “We know we have some work to do, and we will get it right.”

Note to banker Keegan – time is money as you may know.  Your reps get paid to talk to us, but customers are losing millions of hours of time and frustration is not good for anyone’s health.  At a minimum every People’s United customer should be compensated with a “goodwill” check for at least $1,000 or something else of equal value.  In addition, it is ridiculous not to “get it right” the first time – you are dealing with money entrusted to you by longtime customers.  I would not be surprised to see a massive exodus of customers from People’s United which was once a bank with distinguished customer service and a long history in Connecticut and other states.

In any banking merger, the combination of accounts — and how it unfolds — can leave a powerful first impression.

The day after the holiday weekend, social media lit up with complaints and lines formed in branches with customers, many of them not able to get into their accounts.

“Some of these things are just not obvious when you’re doing the [planning] even when you are doing mock conversions,” Keegan said.

Wait times for questions on digital banking on M&T’s customer service line were averaging about 2 hours Tuesday, down from 3-plus hours a week ago, according to a bank spokesman.

Note to Banker Keegan – all of the numerous issues and screw ups customers have had to endure should have been obvious.  You act like you never ran a bank before the merger.  Mergers are complicated but you had many months to get it right – the results exude a level of incomprehensible incompetence.  We want results not dumb excuses.

Not only are things a complete mess almost two weeks after the merger but all People’s customers were cut off from online and branch services from September 2 to September 6.  For the many people who do all of their banking online this was a major problem compounded by the ensuing mountain of issues arising after the transition to one bank.

Just a small list of issues customers have been facing:

• Passwords that don’t work
• Online bill payments nonfunctional – “you are not authorized to make payments” but no explanation as to why or how to fix it
• Mobile banking app is in unreadable micro print on IOS and extremely user unfriendly and confusing
• Customer service still ridiculous – I have been on the phone now for over two hours! (UPDATE – I FINALLY GOT TO A REP AFTER WAITING 4 HOUR AND 15 MINUTES.  I casually mentioned to the rep that I did not think the merger and system update was going smoothly and she told me in a hostile tone that the merger was “going very smoothly” Wow – at least own your problems when you cause them!) “Thank your for your patience.  Our representatives are helping other customers.”  M&T has 22,000 employees! Where are they? – it should be all hands-on deck and 24-hour service, not banking hours.
• Excessive monthly fees including a huge $25 monthly “maintenance charge” to have a checking account unless you keep $7,500 in the bank collecting zero interest.  This type of fee basically tells low income or financially stressed people to get lost.
• Bill payment history has been deleted so you no longer have a record of how much or when you made payments to your credit card company, mortgage, etc etc.

M&T has given former People’s United customers powerful and numerous reasons to take their business elsewhere and I have no doubt customers will leave in droves.  The relevant banking regulators should take a close look at this merger mess and levy appropriate penalties under the law of common sense.

The post Worst Bank Merger Ever – M&T Bank and People’s United – Nothing Works, and You Can’t Reach a Bank Rep first appeared on Problem Bank List.

Overwhelmed by bad loan, the Comptroller of the Currency shuttered Guaranty Bank and appointed the FDIC as receiver.  The FDIC in turn sold the failed bank to First-Citizens Bank & Trust Company, Raleigh, North Carolina, which assumed all deposits of Guaranty Bank.  No depositors of the failed bank lost money and all deposits assumed by First-Citizens will continue to have uninterrupted FDIC deposit insurance coverage.

Guaranty Bank had 119 branches spread out over five states when it was shut down with 107 of the branches located in retail outlets such as grocery stores.   Having a large number of bank branches located in grocery stores was probably an unwise and unprofitable allocation of resources as evidenced by the fact that First-Citizens will not reopen any of the “grocery store branches”.  Only 12 brick and mortar branches located in Wisconsin, Minnesota, and Illinois will be reopened.

Expired

Depositors accustomed to doing their banking while buying bread and ice cream will now have to visit a First-Citizens branch.  Over the weekend depositors of the failed Guaranty Bank will continue to have access to their money through the use of checks, debit cards and ATM machines.  There will, however, be no ATM access at any of the grocery store branches.  Depositors with accounts at the grocery store branches who want cash will have to deal with the inconvenience of waiting for First-Citizens to update their systems that integrate the branch accounts.

Perhaps a look at the operating philosophy of Guaranty Bank may shed some light on why a bank operating for 94 years winds up failing.  Here’s some verbiage from Guaranty Bank’s website.

Founded in 1923, we started as a small savings and loan business in Milwaukee, Wisconsin. Today we have more than 120 retail branches in five states.

We have a unique business model with the majority of branches in grocery stores. Our branch locations give customers access to the bank in the places where they shop, work and live, making banking easier for them.

We go where other banks don’t. Some of our customers may have been turned down at other banks, forcing them to rely on check cashing and payday loan stores or pawn shops.

We offer unique products and services designed to help a customer understand how to manage a checking account, build or rebuild their credit score. We help customers get on track.

We are a community partner. We work with community groups and other organizations to educate their members about basic financial matters.

Lending to people turned down by other banks due to poor credit and low income? Educating customers about basic financial matters that they should have learned in grade school?  Focused lending efforts directed at people who need to rebuild their credit?

Guaranty Bank sounds more like a government social program rather than a for profit business focused making sound loans with balanced risk evaluations.  This bank followed the path of many other failed banks by making loans to borrowers unable or unwilling to pay back their loans.

At March 31, 2017, Guaranty Bank had total assets of $1.0 billion and total liabilities of $1.0 billion.  First-Citizens Bank agreed to buy $892.6 million of the failed bank’s assets with the balance to be retained by the FDIC for later disposition.  The FDIC states the sale of failed banks to another sound institution is the most cost effective method of resolving a failed bank.

The estimated cost to the FDIC Deposit Insurance Fund is $146.4 million.  Guaranty Bank is the fifth banking failure of the year and the first in Wisconsin.  The last bank failure in Wisconsin occurred last year on March 11, 2016.

The post Billion Dollar Bank Failure – Guaranty Bank of Wisconsin Closed by Feds first appeared on Problem Bank List.

In terms of asset size the collapse of First NBC Bank is one of the largest banking failures since the peak of the banking crisis in 2008 – 2009 when over a dozen banks failed with assets of over $5 billion.  The total assets of First NBC Bank at $4.74 billion is almost 20 times larger than all the banking failures that occurred during 2016.  Total assets of all 7 domestic banks that failed during 2015 (excluding Doral Bank of Puerto Rico) was only $827.5 million.  Total assets of all 18 banking failures that occurred during 2014 totaled $3.1 billion.  We have to go all the way back to 2013 to find a time when failed banks held assets of over $4.74 billion.  Total assets of all 24 banks that failed during 2013  totaled $6.1 billion.

First NBC Bank

First NBC Bank experienced a combination of bad timing and aggressive lending.  The Bank was established in May 2006 ostensibly to help out the businesses and residents of New Orleans after the devastating Hurricane Katrina.  Unfortunately, shortly thereafter the country was hit by the severe banking and financial crisis that began in late 2008.  Aggressive lending was the norm before the financial crisis and as collateral values tanked banks began to experience huge loan losses.

First NBC Bank explained the operating philosophy of management on its web site as follows:

The Bank’s founders, led by New Orleans native and veteran Banker, Ashton J. Ryan Jr., were determined to develop a community bank guided by the principals of stability and soundness, building long-term banking relationships, responsiveness to customer needs, high quality service and becoming an active participant, with credibility, in the communities it serves.

Even during the recent economic downturn, First NBC Bank has not stopped lending and has been applauded for providing financial assistance to small businesses still recovering from the Hurricanes, as well as supplying capital for new small businesses to open their doors.

Despite the severe problems the banking industry was experiencing during the financial crisis, First NBC Bank managed to do quite well and during 2013 raised millions via private placement stock sales and an IPO offering to the public at $24 per share.  Those shares today trade at under $3 per share.  Last month, when the FDIC classified First NBC Bank as “significantly undercapitalized” it became clear that the end was near.

After the closure of First NBC Bank all deposit accounts were transferred to Whitney Bank and no depositors lost any money.  Various time deposits accounts, individual retirement accounts, brokered deposits and certain CDs were closed out and the FDIC will mail checks to the owners of those accounts.

Customers whose accounts were transferred to Whitney Bank will have immediate access to their money.  Over the weekend, deposit holders can also access their funds through the use of checks, debit cards and ATMs.

All 29 branches of First NBC will reopen during normal business hours as branches of Whitney Bank.  All depositors will continue to have their funds insured by the FDIC up to the applicable limits.

As of December 31, 2016, First NBC Bank had total assets of $4.74 billion and total assets of $3.54 billion.  Whitney Bank agreed to buy only about $1 billion of the failed bank’s assets, leaving the FDIC to dispose of the remaining assets.

The loss to the FDIC Deposit Insurance Fund (DIF) was a massive $996.9 million, greater than the losses that occurred on all bank failures over the prior two years.  At year end 2016 the DIF held $83.2 billion to cover future banking losses.  First NBC Bank was the fourth banking failure of 2017 and the first in Louisiana since November 2011.

The post Five Billion Dollar Bank Failure – First NBC Bank, New Orleans, Closed by Regulators first appeared on Problem Bank List.

Although Allied Bank was in business for over a century since its founding in 1902, the bank never gained traction to expand its economic footprint either within Arkansas or nationally.  When regulators closed the bank, total assets amounted to only around $66 million.

Allied Bank has been on the rocks for years and one look at its financials makes it clear that the only mystery involving this bank failure was what took regulators so long to close this poorly run enterprise.

The FDIC, appointed as receiver for Allied Bank, sold the failed bank to Today’s Bank, Huntsville, Arkansas, in order to protect depositors.  All five branches of Allied Bank will reopen as branches of Today’s Bank and there will be no interruption in FDIC deposit insurance coverage.

Until Allied Bank branches reopen during regular business hours as part of Today’s Bank, depositors of the failed bank can continue to access their funds through the use of checking accounts, ATM machines, and debit cards.

As of June 30, 2016, Allied Bank had total deposits of $64.7 million and total assets of $66.3 million.  Today’s Bank agreed to purchase all of Allied Bank’s assets, probably at a large discount and along with a loss share agreement with the FDIC which will limit some or all of future losses on the loan portfolio purchased by Today’s Bank.

The cost to the FDIC Deposit Insurance Fund is estimated at $6.9 million.  Allied Bank becomes the fifth banking failure of the year and the first to occur in Arkansas.

The post Allied Bank, Mulberry, AK, Becomes Fifth Bank Failure of 2016 first appeared on Problem Bank List.

Founded over a hundred years ago in 1902 The Woodbury Banking Company remained a very small bank with only one branch and only about $21 million in total assets.

The sole branch of The Woodbury Banking Company will reopen on Monday as a branch of United Bank.  Over the weekend depositors will have access to their funds through the use of checking accounts, ATM machines, and debit cards.  All customers of The Woodbury Banking Company will retain full FDIC deposit insurance coverage up to the applicable limits.

As of June 30, 2016, The Woodbury Banking Company had $21.1 million in total deposits and $21.4 million in total assets.  United Bank, under the purchase and assumption agreement with the FDIC will purchase $17.8 million of the failed bank’s assets with the remainder to be retained by the FDIC for later disposition.

The cost to the FDIC Deposit Insurance Fund is estimated at $5.2 million.

The Woodbury Banking Company is the fourth banking failure of 2016 and the first banking failure in Georgia this year.  The last banking failure in Georgia occurred on October 2, 2015 when regulators closed The Bank of Georgia, Peachtree City, GA.

The number of banking failures has dramatically declined during 2016 from previous years.

Banking Failures Since 2008

Year           Number of Bank Failures

2008             25

2009           140

2010            157

2011              92

2012              51

2013             24

2014              18

2015                8

2016                4

Total           519

The post The Woodbury Banking Company Closed by Regulators first appeared on Problem Bank List.

First Cornerstone Bank was established in March 2000 and by the time of its failure had grown to six branches with over $100 million in total assets.  The Bank was locally owned and operated by a group of entrepreneurs who targeted their banking services to individuals and especially small businesses.  According to the Bank’s website their primary mission was to fund local entrepreneurs and help local business and the community.

All of First Cornerstone Bank’s six branches will reopen as branches of First-Citizens and all depositors of the failed bank will automatically become depositors of First-Citizens.  FDIC deposit insurance coverage will continue without interruption up to the applicable limits of coverage.  All depositors of First Cornerstone Bank will have access to their money over the weekend through the use of checks, debit and ATM cards.

First Cornerstone Bank had total assets of $103.3 million as of March 31, 2016 and total deposits of $101.0 million.  As purchaser of the failed bank, First-Citizens assumed all deposits of First Cornerstone as well as purchasing all of the failed bank’s assets.

Prior to the closing of First Cornerstone Bank, there have been two other banking failures during 2016.  Total assets of all three failed banks amounted to $191.1 million and total losses to the FDIC Deposit Insurance Fund totaled $27.6 million.  The number of banking failures has drastically declined from the dark days of the banking crisis during 2010 when 157 banks were closed.  The number of banks failures has now declined every year since 2010.

Banking Failures Since 2008

Year           Number of Bank Failures

2008             25

2009           140

2010            157

2011              92

2012              51

2013             24

2014              18

2015                8

2016                3

Total           518

The loss to the FDIC Deposit Insurance Fund from the failure of First Cornerstone Bank is $10.8 million.  The last bank failure in Pennsylvania occurred during February 2014.

The post First Cornerstone Bank, King of Prussia, PA – Largest Bank Failure of 2016 first appeared on Problem Bank List.

Trust Company Bank is the second banking failure of the year.  The last banking failure of 2016 occurred on March 11 when regulators closed North Milwaukee State Bank, Milwaukee, Wisconsin.

Established in 1902, Trust Company Bank was one of the oldest banks in the country and many of its shareholders were members of the local community as noted on the Bank’s website.

Community Trust is the relationship forged by the bank accepting local citizens as stockholders and depositors, financing the growth and development of local businesses, individuals, and institutions, thereby fundamentally aligning the interest of the bank and the communities it serves.

Employee Trust is created by the bank’s commitment to attract, retain, and motivate employees, and by employees reciprocal commitment of intense effort and dedication to the bank and its principles of service to clients, community, employees and shareholders.

Shareholder Trust is achieved by providing superior returns to the shareholders, that have provided the capital that enables the bank to serve its clients, the communities in which it operates, and its employees.

Despite having been in business for over a century Trust Company Bank was strictly a small local player in the banking industry with only $20.7 million in assets at the time of its failure.  All four branches of Trust Company Bank will reopen as branches of The Bank of Fayette County and all deposits will continue to be insured by the FDIC up to the applicable deposit limits.  All depositors of Trust Company Bank have full access to their money over the weekend through the use of checking accounts, debit cards, and ATM cards.

As of December 31, 2015, Trust Company had total assets of $20.7 million and total deposits of $20.3 million.  The Bank of Fayette County agreed to assume all deposits of Trust Company Bank but agreed to buy only $3.9 million of the failed bank’s assets.  The remaining $16.8 million of assets will be retained by the FDIC for later disposition.

The cost to the FDIC Deposit Insurance Fund for the failure of Trust Company Bank is $7.2 million.  The last banking failure in Tennessee occurred on August 23, 2013, when Community South Bank, Parsons, TN, was closed by regulators.

The post Trust Company Bank, Memphis, TN, Closed by Regulators first appeared on Problem Bank List.

North Milwaukee State Bank, Milwaukee, Wisconsin, was deemed insolvent and closed by state regulators on March 11, 2016 . The FDIC, after being named as receiver sold the failed bank to First-Citizens Bank & Trust Company, Raleigh, North Carolina.  Under the purchase and assumption agreement with the FDIC, Citizens Bank & Trust agreed to assume all deposits (excluding certain brokered deposits) and to purchase all of the failed bank’s assets.

North Milwaukee State Bank had been around for about 45 years since being established on February 12, 1971.  Anyone visiting the bank’s website probably got the impression that North Milwaukee was profitable and had a bright future.

NMSBank is committed to providing financial solutions by offering a range of competitive products and services to both personal and business customers.

Our Vision To be recognized as a world class financial institution by offering a comprehensive suite of products to meet the needs of our customers.

Our Mission To become one of Wisconsin’s most profitable, competitive, innovative, and customer focused financial institutions dedicated to providing to the community, financial products and services which will help our customers achieve their financial goals.

The irony here is so delicious the website should post a calorie count – the bank that couldn’t shoot straight and went belly up was going to help their customers achieve financial wealth and independence.  Did management ever read their own website?

Nonetheless, none of the depositors of North Milwaukee will incur any financial losses since deposits are covered by the FDIC up to applicable limits and the deposit insurance coverage continues uninterrupted as First-Citizens takes over.  All depositors of North Milwaukee automatically become depositors of First-Citizens and can continue to use checking, ATM services, and debit cards over the weekend to withdraw cash and for other normal banking transactions.  Both branches of North Milwaukee will reopen as branches of Citizens Bank & Trust.

As of December 31, 2015, total assets of North Milwaukee State Bank amounted to only $67.1 million and total deposits were $61.5 million.

The cost to the FDIC Deposit Insurance Fund (DIF) is estimated at $9.6 million which essentially means that almost 15 percent of the banks assets were worthless.  The FDIC has determined that the least costly method of dealing with bank failures is to sell the failed bank to another institution.

North Milwaukee State Bank becomes the first banking failure in the nation this year. The last bank to fail in Wisconsin was the Bank of Wausau, Wausau, WI, which was closed on August 9, 2013.

The post North Milwaukee State Bank, WI, First Bank Failure of 2016 first appeared on Problem Bank List.

All but one of the 25 banks that fell off of the Problem Bank List during the quarter ending September 30, 2015 were either acquired, able to obtain or grow additional capital, or purchased by another institution.  The only failure of an FDIC insured institution during the quarter ending September 30, 2015 occurred on July 11, 2015 when Premier Bank, a small Denver, CO, institution was closed by regulators.

The number of problem banks has declined significantly since the financial crisis due to improved asset quality, growth of loan portfolios, more stringent lending standards, improvement in commercial and residential market values, and a slowly improving economy.

The number of problem banks has declined by over 77 percent since reaching a peak during early 2011.

The amount of assets held by problem banks has closely tracked the decline in the number of problem banks.  As of September 30, 2015, Problem Bank assets totaled $51.1 billion, a huge decline from almost half a trillion dollars at the end of 2009.

While $51 billion in troubled assets is insignificant in terms of the total assets held by all FDIC insured institutions, it still remains a source of concern. Consider that almost a decade after the advent of the financial crisis over 200 banks remain capital impaired and subject to possible failure.  Some of these problem banks may be of considerable size.  A simple calculation shows that the average problem bank has about a quarter of a billion dollars in total assets.

The post FDIC Insured Problem Banks at Lowest Level Since 2008 first appeared on Problem Bank List.