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Local Stocks: Banks Take a Beating in a Bad Week
Tuesday, May 26, 2009 10:51 AM


(Source: The Kansas City Star (Kansas City, Missouri))trackingBy Mark Davis, The Kansas City Star, Mo.

May 26--Bank stock owners may hope for a rebound from last week's market mauling that was capped by Friday's news of a special assessment from the Federal Deposit Insurance Corp.

The FDIC said it would nick banks 5 cents for every $100 in assets, less their capital, at midyear. These fees will add several million dollars to the deposit insurance bills Commerce Bancshares Inc. and UMB Financial Corp. pay.

Bank officials couldn't be reached Friday for comment.

FDIC's deposit insurance fund needs the money and all banks will pay the bill. The one question remaining is how fast the bills come in.

"The fund is light by a pretty significant amount," said banking analyst Peyton Green at Sterne Agee & Leech. "This assessment is merely the beginning of assessments."

Friday's news actually was lighter than Green and others had been factoring into their appraisals of banks. The FDIC had been thinking of a 10-cent assessment based on insured deposit balances, which Green said would have been significantly higher.

Green said the shift lowered his estimate of the earnings hit at both Commerce and UMB to 7 cents a share. His original estimates had been 11 cents a share at Commerce and 12 cents a share at UMB.

Both companies likely will record the cost in the second quarter, though payment isn't due until September, Green said.

Using assets to levy the fee also puts a greater share of the total cost on larger banks, which tend to finance more of their operations from nondeposit funding sources than smaller institutions.

This first round should raise about $5.6 billion, according to Bloomberg News.

Commerce shares took a 10.6 percent hit last week, losing $3.59 and finishing at $30.31 on Friday.

UMB shares fell 12.8 percent last week, a drop of $5.70 to Friday's close at $38.85.

Markets were closed Monday for the Memorial Day holiday.

--Mediware Information Systems Inc. purchased the assets of a health-care software company based in Atlanta.

SciHealth Inc.'s products help institutions deliver services more efficiently and effectively, according to Mediware's announcement. They're in use at more than 100 hospitals.

Lenexa-based Mediware, which provides blood and medication management software, did not disclose terms of the purchase. Its shares closed Friday at $5.

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