Comments on: Decatur First Bank Requests Bailout Assistance; Worries About Future

By: davhud

davhud — Wed, 18 Mar 2009 02:32:01 +0000

http://www.nytimes.com/2009/03/16/opinion/16partnoy.html?_r=2&ref=opinion

By: davhud

davhud — Wed, 18 Mar 2009 02:31:34 +0000

Not exactly the response I was hoping for…

By: Judy Turner

Judy Turner — Tue, 17 Mar 2009 15:07:48 +0000

You’re right about that, but so far, so good!

Judy

By: David

David — Tue, 17 Mar 2009 13:20:23 +0000

You may want to revisit the triple A rating on your bonds. The ratings agencies have a terrible record of ratings inflation.

By: David

David — Tue, 17 Mar 2009 01:20:28 +0000

I basically cash out my whole check and leave a token amount for the sludge bank in deposit, not DFB in this case.

By: Judy Turner

Judy Turner — Mon, 16 Mar 2009 20:31:27 +0000

Wow! Very interesting comments. First, I’d like to thank those that do have faith in us and tell you how very much we appreciate your confidence and your business. I know you don’t want a lecture or lesson on bank investments so just suffice it to say that all of our MBS securities are backed by the full faith of the U. S. Government. Our municipals have to be “bank qualified” and are triple A rated. All of our bonds continue to pay interest and we haven’t lost money on any of them. If no one was willing to buy MBS and municipals, we would have much worse problems in the country than at present.

Remember, we do have FDIC insurance and no one has every lost a penny on insured deposits.

Those of you that were concerned about our taking TARP money can rest easy. We made the decision last week to withdraw our application after seeing that Treasury continued to add stipulations to the program. We were a little concerned in the beginning that they had the right to change the agreement at any time and make it retroactive. We are well-capitalized and plan to continue to be so.

Each bank has to make its own decision about TARP. The fact that a bank does or doesn’t apply shouldn’t indicate anything other than each bank has analyzed its situation and made a decision that they think is best for them. You’ve probably read that many of the banks that received TARP have made the decision to repay it now since one change is that you don’t have to wait three years. This again is an individual institution decison. My major issue is that small banks should have the same access as big banks. The idea that the government decides which banks are important and which aren’t is not good. As you look at the banks that have received TARP, you see that there is no consistent criteria. My personal feeling is that Decatur, Ga. is just as important as any city that has received TARP for its banks. Actually, I think Decatur, Ga. is more important! (But I’ve been accused of being biased.)

Judy Turner

By: Steve

Steve — Mon, 16 Mar 2009 12:05:46 +0000

Mortgage backed securities per se are not bad and didn’t cause most of the problems with banks – it was various derivative and leveraged products. As for muni bonds, a little research will show they are still considered one of the safest investments and have a very low default rate.

The smaller banks in Georgia that have gone under were mainly wrapped up in real estate construction loans, which are not the same thing as MBS by a long shot. Check the article in Sunday’s AJC.

David, I’m curious as to where you placed your business that you considered safer than DFB?

By: David

David — Mon, 16 Mar 2009 09:53:19 +0000

I remember bank shopping in the spring of 2008 at Decatur First. I asked to see their books, and the banks accountant let me see them. I felt anxious about the millions in mortgage back securities. Also not mentioned in the article is that the bank has millions in municipal bonds, which I fear may be endanger of defaulting should the local governments not be able keep up their tax collections. Of course there is FDIC. At the time both investments overwhelmed shareholders equity. I don’t know how sufficient the paid in capital is to cover the possibility of municipal bond defaults. I wish the investors of DFB well, and I am sorry to sound unkind. Perhaps their latest financial statements should provide sunshine and happiness. I say if Judy needs a TARP bail out then she is using fine acumen. I pray that DFB gets its bail out. The shame is if the bank had only invested the reserves in Treasuries instead they would not be talking bailout. I’m sorry Judy. You are decent people, and it is sad you got defrauded.