Is it a foreverBank?

March 26, 2009 5:49 AM

I'm thinking of putting a (for me) large amount of money in Everbank, because I want to be out of US dollars. Has anyone heard any scuttlebutt regarding their exposure to bad debt?

(I know it shouldn't matter because they're FDIC insured, but would like to avoid the inconvenience of changing banks again later. I know they look OK according to the numbers on the FDIC website, but my understanding is that part of the reason for this mess is that people found a way to keep sketchy debt off their official books.)

posted by Coventry to Work & Money (10 answers total)

I'm sure I'm missing something, but if it's backed by the FDIC, it is an American bank and thus IS US Dollars?
posted by gjc at 6:23 AM on March 26, 2009

Gjc: Everbank has Euro-denominated accounts. They are, however, a US bank. This is advantageous because from everything I've read, setting up an actual European bank account is quite a pain.
posted by Kadin2048 at 6:34 AM on March 26, 2009

Response by poster: They have FDIC-backed accounts denominated in foreign currencies.
posted by Coventry at 6:36 AM on March 26, 2009

I have money with them, and went through the same process you are going through. The Everbank financial statements are available from the FDIC web site. Go to:

http://www2.fdic.gov/idasp/main.asp

Then enter 34755 for the FDIC number at the top. You can check out their financial statements that way. Just choose "All Summary Information" and then click "Generate Report" button to see the full statement from last year.

I am no accountant, but my understanding is that the Tier 1, 2 and 3 numbers would show if they held any of the toxic dreck. They have no Tier 3, which I would think would have been the worst.

Maybe someone who knows more about bank capital can comment, but I put money with them, though under the FDIC insurance limits.
posted by procrastination at 6:51 AM on March 26, 2009

You'd generally be right, procrastination, but one of the things that have gotten the banks into this mess is SIV's which are off blanace sheet vehicles designed to keep the public uninformed about the bank's actual holdings.
posted by jourman2 at 7:25 AM on March 26, 2009

I don't think Everbank is quite large enough to warrant having a SIV. Those tend to be a tens of billions of dollars thing, and Everbank itself is only about 6 billion now, after growing over the past few years. I doubt they would have set one up when they were smaller. I did a google check, though, and there is not any mention of there having one.
posted by procrastination at 8:25 AM on March 26, 2009

Do you read their newsletter? They send out a daily newsletter called the Daily Pfennig with currency news etc. I recall that they answered the question regarding their exposure to debt at some point but I'm afraid I can't find it right now.

If you want to, you can have a look through their archive but I don't see a search function. They are, I believe, quite approachable though, and I'm sure that if you gave them a call or sent an email they'd answer you and point you to the right place to see the official answer in black and white too.

(I don't have an account there or anything, I just like reading the Pfennig.)
posted by gwpcasey at 11:48 AM on March 26, 2009

One thing to worry about is that, when the hyperinflation hits, the FDIC $250,000 limit won't allow you to recover much of your euro-denominated money.
posted by jepler at 1:38 PM on March 26, 2009

Response by poster: @jepler: I know, but I didn't want to sound threatening. It would have just led to yet another fruitless argument about the likelihood such a catastrophe.

@gwpcasey: Thanks for the pointer, that looks useful..

@procrastination: Good point about their size; you may be right.
posted by Coventry at 5:10 AM on March 27, 2009

Response by poster: Er, "likelihood OF such a catastrophe."
posted by Coventry at 5:11 AM on March 27, 2009