Dot Com Bomb: Feds Shutdown NetBank, ING Acquires Bank's Deposits

[mandy]

Federal regulators closed NetBank Inc. (NTBK), a $2.5 billion thrift based in Alpharetta, Ga., on Friday partly due to significant mortgage-related losses the company sustained in 2006 and 2007.

NetBank marked the largest bank to fail since since the early 1990s, which marked the end of the savings and loan crisis. The Office of Thrift Supervision closed NetBank at 3 p.m. EDT, the federal regulator said, and the company was immediately taken into receivership by the Federal Deposit Insurance Corp.

The OTS said weak underwriting standards, failed business strategies, and a lack of proper controls forced NetBank to suffer significant losses starting in 2006.

"They had significant problems with respect to loan underwriting, poor documentation, and a high amount of early payment defaults," OTS spokesman Kevin Petrasic said. "All of those factors led to fairly significant losses that increased substantially in 2007."...

full article: http://money.cnn.com/news/newsfeeds/arti...RTUNE5.htm

ING acquires NetBank's deposits:

ING DIRECT Acquires Deposits of NetBank

Nation’s Largest Direct Bank Acquires Deposits and Customers of the Nation’s Oldest Direct Bank September 28, 2007, Wilmington, DE –

ING DIRECT, the nation’s largest direct bank and fourth largest thrift (part of Netherlands-based ING Groep NYSE: ING), today announced it will acquire $1.4 billion in deposits and 104,000 new customers of Netbank for $14 million.

Headquartered in Alpharetta, GA and established in 1996, Netbank was the nation’s oldest Internet bank serving retail and business customers in all 50 states.

The acquisition further strengthens ING DIRECT’s position as the leading direct bank which aims to meet the financial needs of “Main Street, USA.” “ING DIRECT has a passionate focus on delivering a first-rate, technology-enhanced customer experience and we want to ensure the early adopters remain at the forefront of branch-free online banking,” stated Arkadi Kuhlmann, CEO of ING DIRECT. “The acquisition of Netbank’s customer relationships is part of ING DIRECT’s goal to broaden its reach and inspire Americans to become a nation of savers. We anticipate a seamless transition for Netbank’s customers into the ING DIRECT family,” added Arkadi.

Since its inception in 2000, more than 5.5 million Americans have entrusted their savings with ING DIRECT, building the bank to $57 billion in deposits, $23 billion in mortgage loans and $75 billion in assets.

The transaction was approved and closed today by the Federal Deposit Insurance Corporation (FDIC).

press release: http://home.ingdirect.com/about/about.as...s#09282007