AboutPaul Henneman Expertise Stock forecasting and fair market valuations.
Experience
Past/Present clients CBSMarketwatch.com, Hoovers.com, Multexinvestor.com, Bank of NY, numerous hedge funds and institutions, other partners and clients can be viewed at http://www.valuengine.com/about/careers.html
Question We have stock in a bank that has recently been taken over by the FDIC who will sell it to another large bank. What will happen to the stock in the failed bank?
Answer Thank you for your question!
Unfortunately this can vary greatly depending upon the exact circumstances of the bank you hold shares in, and the agreements reached with the new bank that is acquiring the assets of the failed bank. As a shareholder, you do hold a claim against the failed bank for the portion of ownership you own (number of shares you have). The failed bank will sell its assets off to raise funds to pay outstanding debt and other obligations. Unfortunately, shareholders are pretty far down the list in terms of who gets paid what. It is likely that you may not get anything.
However, if the bank was sold and not moved into FDIC control, then there would likely be a conversion from your old stock to the stock of the new, acquiring bank. But it sounds like this did not take place in your situation, and the bank was taken over by the FDIC.
Really the only way to say for sure what will happen is to contact either the new banks investor relations department, or the FDIC directly. The FDIC's website is www.fdic.gov, and there is information online for each failed bank and you can look up yours, or you can contact them directly for more information.
Unfortunately, this type of situation is generally a bad one for shareholders in that you may get very little or nothing. I hope that you did not have too much invested, and I wish you the best,
Sincerely,
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com
