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TORONTO – North American stock markets pulled back some of their gains, but remained positive, after the Fed released the methodology for its "stress tests" of 19 U.S. banks – which unearthed a new bout of potential gloom.

The report includes details which project a more pessimistic outlook for the U.S. economy next year, including a scenario that operates on 3.3 per cent contraction in the U.S. economy this year, and only 0.5 per cent growth next year, while unemployment is expected to sit at 10.3 per cent at the end of next year.

After the report, Toronto's S&P/TSX composite index wavered before inching back above the triple-digit gain mark, ahead 104.39 points to 9,513.89, and the Canadian dollar moved ahead 1.04 of a cent at 82.75 cents US.

On the TSX, gold stocks were ahead 3.2 per cent as the June bullion contract gained $6 to US$912.60 on the New York Mercantile Exchange.

Energy stocks gained 1.7 per cent as the June light, sweet crude contract rose $1.86 to US$51.48 per barrel on the Nymex.

On Wall Street, investors looked at other aspects of the U.S. Federal Reserve's report, which also said the government is prepared to rescue any of the banks that underwent "stress tests" and were deemed vulnerable if the recession worsened sharply, and said that the U.S. banking system wouldn't be allowed to fail.

The Dow Jones industrial average gave back some of its gains after the report was release. Then, it made a cautious move towards recovering them, rising to 95.49 points to 8,053.

The Nasdaq composite index was ahead 31.53 points to 1,684, while the S&P 500 index gained 10.35 to 862.

In other data, U.S. home sales slipped last month, but still managed to beat expectations, giving investors hope that builders are starting to see signs of a housing market recovery no teletrack payday loans. New-home sales fell 0.6 per cent in March to a seasonally adjusted annual rate of 356,000 from an upwardly revised February rate of 358,000, the U.S. government said.

Meanwhile, Ford announced results that beat analysts' expectations. The automaker, the only one of the Detroit Three that hasn't asked for immediate government aid, booked a net loss of $1.4 billion or 60 cents a share during its first quarter, with adjusted earnings of 75 cents per share.

Orders to U.S. factories for durable goods dropped by 0.8 per cent last month, less than the 1.5 per cent decline that economists had been expecting, according to the U.S. Commerce Department.

Centerra Gold Inc. (TSX: CG) shares were ahead 16 per cent to $7.23 after the company announced a new agreement with the government of Kyrgyzstan over its Kumtor mine in the Central Asian republic, giving the government one-third of the company.

SNC-Lavalin Group Inc. (TSX: SNC) has acquired a 50-employee consulting engineering firm based in Santiago, Chile, for an undisclosed price. Shares rose 93 cents to $36.04.

3M Co.'s quarterly profit dropped 48 per cent as the global economic slowdown hurt its sales, and prompted it to scale back its 2009 outlook again.

Overseas, Britain's FTSE 100 ended up 3.4 per cent in late afternoon trading, Germany's DAX index rose three per cent, and France's CAC-40 rose 3.1 per cent.

Japan's Nikkei stock average fell 1.6 per cent, while Hong Kong's Hang Seng added 0.3 per cent.

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Not long ago, a TV commercial showed some of the communities that supply materials and ingredients for Anheuser-Busch’s beer. Barley stalks waved in Montana, and hop vines glistened in Idaho. Beechwood chips for Budweiser come from Millington, Tenn. The narrator intoned: "It’s the people and places that make Budweiser the great American lager. Some things aren’t meant to change. Some things never will."

But now, Millington’s tie to Anheuser-Busch is about to be severed. The brewer’s drive for efficiency has led it to part ways with the city’s Beechwood Corp. The company will stop production within a week, ending a 62-year run as a supplier to Anheuser-Busch. Nine employees will lose their jobs.

"Not a happy situation," said Tom Urani, 61, a St. Louis businessman who bought the company 15 years ago.

Since the 1980s, Beechwood Corp. has shared Anheuser-Busch’s business with Beech Manufacturing, based in Frohna, Mo. Both companies supply chips that help yeast ferment and age Budweiser and Michelob beers, a process that dates back to the 1800s.

After Urani sent a letter to the Post-Dispatch claiming that his company had been "summarily dismissed" as an A-B supplier, his phone buzzed with calls from television and radio stations. His complaints made their way onto KMOX, where Dave Peacock, president of Anheuser-Busch Cos., called in to defend A-B.

The effort to be more efficient — and trim suppliers when necessary — would have happened whether or not A-B was purchased by InBev, said Peacock. "We have a long history of efficiently purchasing quality goods," he said.

Peacock told the Post-Dispatch that Urani had "planted the seed" that A-B should choose one supplier. "He didn’t care about his competitor going out of business," Peacock said.

Urani acknowledged that he suggested that A-B might be better off going to a single supplier — but only in a process that included a buyout for the displaced supplier. Things didn’t work out so cleanly.

"They took half my idea," Urani said payday loan.

The drama began about a year ago, when Anheuser-Busch asked Beechwood Corp. for price quotes on various volumes of chips. In some cases, the volumes were only 40 percent of Beechwood Corp.’s typical output. Urani told the brewer that overhead and various costs would make the low levels of activity unsustainable.

Rather than having a supplier work on half-strength or lower, Urani suggested the brewer give one firm all its business and buy out the other one.

A-B followed up, requesting bids for the full volume of its beechwood chips — an amount worth $3 million to $4 million per year. Beech Manufacturing and Beechwood Corp. sent in their bids. The answer came back — Beechwood Corp. was out. Anheuser-Busch would buy at least the same amount of beechwood chips as before, but they would come exclusively from Missouri.

Both Urani and Peacock say Anheuser-Busch followed its contract. It was a simple decision, said Peacock: Both suppliers provided high-quality chips, but Beech Manufacturing’s bid was better. (John Angelbeck, listed in state records as Beech Manufacturing’s president, could not be reached for comment.)

Urani finds the end hard to reconcile with Beechwood Corp.’s long relationship with Anheuser-Busch. Back in the 1940s, Anheuser-Busch gave the little company’s founder $10,000 to help get the chip operation running. Beechwood Corp.’s business was smaller than a rounding error at One Busch Place, but the relationship was important nevertheless, because beechwood aging is one of Budweiser’s main selling points.

For decades, A-B exercised tight control over the Tennessee supplier, prohibiting it from selling chips to other companies.

"They were difficult to deal with, but fair," said Urani.

"With InBev, it’s all gone. You’re not family. You’re the guy who got outbid by a nickel or two."

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The recession is easing? Not so fast. An unexpected drop in sales of just about everything from cars to clothes sent a sobering message Tuesday: The economy is still vulnerable.

With Americans still losing jobs, a major fear is that people will cut back even further on spending, and that could plunge the economy into a sharper tailspin. Tuesday’s report that retail sales fell 1.1 percent in March deepened concern.

The economy shrank at a 6.3 percent rate in the final three months of 2008, its worst showing in a quarter-century. Some estimate it fared about as poorly in the first three months of this year; others estimate a 4 percent to 5 percent rate of decline. The government will release its initial estimate at the end of April.

A big drop in auto sales led the March decline in retail sales. Business was way down at clothing, appliance and furniture stores, too quick cash.
Still, analysts say there’s reason to hope. Shoppers’ appetites should get a lift from the tax credits of $400 per worker and $800 per couple in the government’s $787 billion economic stimulus package. Most workers in April started seeing a $10 bump in their weekly paychecks.

As for the March sales decline, some analysts didn’t think it was as bleak as it looked. Part of the decrease was simply because prices have fallen, depressing sales totals.

Some analysts said they remain hopeful the economy actually will start to grow again later this year, possibly in the final quarter.

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Optimism that the fortunes of financial companies like Citigroup were improving sparked a four-week rally beginning March 10 that drove the Standard & Poor’s 500 index up 25 percent. But now investors will find out exactly how companies across all industries performed during the first three months of the year.

Those quarterly results will determine whether the surge was the beginning of a bull market, or just a blip.

After all, the market’s last promising rally was derailed not by jobs data or an emergency federal bailout but by forecasts from companies that make everything from computer chips to tin cans to movies.

The S&P 500 jumped 182 points, or 24 percent, to 934 between Nov. 20 and Jan. 6. The next day, technology bellwether Intel Corp., aluminum producer Alcoa Inc. and media giant Time Warner Inc. all issued grim earnings guidance. The S&P dropped 28 points, or 3 percent, that day and hasn’t returned to its early January levels since.

The current rally also began with a company announcement. This time, beleaguered and bailed out Citigroup Inc. said March 10 it was profitable for the first two months of the year. The S&P 500 gained 43 points, or 6 percent, that day to 719. The index closed Thursday at 857, and markets were closed on Good Friday.

The S&P could rise more, and even turn positive for 2009, if earnings reports for the first quarter show a strengthening economy. Alcoa, the first big company to report their results each quarter, announced a loss of $497 million on Tuesday evening. But investors were pleased about the aluminum company’s efforts to cut expenses by $2 billion a year, and the shares are up 14 percent since.

Wells Fargo & Co., meanwhile, said Thursday that it expects record first-quarter earnings of $3 billion — about 50 percent more than the same period a year ago. The shares surged $4.72, or 32 percent, to $19.61 that day.

"We’ve got this incredible possibility that the market has turned a corner — that’s it’s not just a bear market rally or a head-fake," said Arthur Hogan, chief market analyst at Jefferies & Co. "Earnings are going to let us know whether the market has gotten ahead of itself, or is justified in its new valuation of stocks."

Here are six companies that will report earnings this week.

General Electric Co.

Why it’s important — GE has a stake in almost every major sector of the economy. It builds turbines for power plants and high-tech medical machines. Jetliners use GE engines. When homeowners remodel, GE’s stainless steel ovens and refrigerators anchor their kitchens. And many people still screw GE light bulbs into their living room lamps. GE is also a barometer of the health of the financial world through its lending arm, GE Capital.

When it will report — Friday

What the experts say — The consensus of analysts surveyed by Thomson Reuters is that GE will earn 21 cents per share in the first quarter on sales of $39 billion. That’s down from profit of 43 cents per share on revenue of $42 billion a year ago.

You’ll know the economy is improving if — GE sells more of its giant energy-generating windmills. That could be a sign that the $787 billion stimulus plan passed by Congress earlier this year, which includes money for alternative energy, is starting to kick in.

You’ll know the economy is not improving if — GE Capital isn’t making money. Test models developed by the Federal Reserve to help financial companies gauge their health show GE Capital will at best break even this year.

Intel Corp.

Why it’s important — Intel is a barometer of spending on personal computers and servers. When computer makers buy more of Intel’s chips, it indicates they believe demand from consumers and businesses is strong. Orders have cratered in recent months. Intel’s profit has plunged to its lowest levels since 2001.

When it will report — Tuesday

What the experts say — Analysts expect net income of 2 cents per share, down from 25 cents per share a year ago. They expect sales to fall nearly 30 percent to $6.96 billion.

You’ll know the economy is improving if — They excel in areas other than the Atom, a small chip for mini-laptops called "netbooks," smart phones and other gadgets. Atom chips are less expensive than the more powerful Intel processors found in full-size computers. Demand for the Atom has been brisk, suggesting people are buying cheaper machines than standard PCs.

You’ll know the economy is not improving if — The gross profit margin falls below Intel’s forecast for the low 40 percent range cash till payday advance. The figure measures the proportion of revenue left over after subtracting the cost of making Intel’s chips and other products. Intel incurs expenses for running its factories at less than full capacity. A low number means Intel factories are even less full than expected and PC demand is humdrum.

Johnson & Johnson

Why it’s important — J&J is the world’s most diverse health care products company, making everything from contraceptives to baby formula to advanced drugs harvested from living cells. That broad base means it captures a large slice of consumer spending. People are normally reluctant to cut back on health care spending.

When it will report — Tuesday

What the experts say — Analysts expect earnings of $1.22 per share on more than $15.4 billion in revenue, down from $1.26 per share last year on sales of $16.19 billion.

You’ll know the economy is improving if — Sales of both prescription drugs and consumer goods rise. People worried about losing their jobs and health insurance cut back on doctor visits, elective surgery and prescription medicines. Investors should consider the demand for consumer goods, not just the revenue.

You’ll know the economy is not improving if — Sales of prescription drugs continue to fall. That indicates consumers are scrimping on expenses usually seen as crucial. In the fourth quarter, J&J observed consumers were becoming more frugal, and sales of items such as contact lenses and diabetes test strips had fallen.

Citigroup Inc.

Why it’s important — The nation’s largest bank is involved in everything from residential mortgages to commercial real estate to credit cards. Any recovery in Citigroup would bode well for the broader financial industry, and the market knows it — Stocks began a four-week rally after CEO Vikram Pandit said last month that January and February were profitable.

When it will report — Friday

What the experts say — Analysts predict a sixth straight quarterly loss — this time, of 36 cents per share. In the first quarter last year, Citigroup lost $5.1 billion, or $1.02 a share.

You’ll know the economy is improving if — There is any sign of improvement in credit. It’s a given that Citigroup will see more debtors fail to make payments; the question is whether the rise in defaulting loans is starting to moderate.

You’ll know the economy is not improving if — Loan defaults are accelerating at a much faster pace than expected.

Sherwin-Williams Co.

Why it’s important — This paint and wall-covering company gets nearly half its sales from its remodeling and repainting business. Another 10 percent comes from new housing and new building construction. As the economy slowed down — and housing sales and renovations with it — Sherwin’s business contracted sharply.

When it will report — Thursday

What the experts say — Analysts surveyed by Thomson Reuters expect it to earn 21 cents per share on revenue of $1.62 billion. That’s below last year’s 64 cents per share on revenue of $1.78 billion.

You’ll know the economy is improving if — Sales of paint for new homes and remodelings rebound, even slightly. That means consumers are more willing to make discretionary purchases.

You’ll know the economy is not improving if — Sales fall more than anticipated. That means the economy could be depressed for longer than expected.

CSX Corp.

Why it’s important — The railroad company transports everything from cars and car parts to heating oil. When consumers feel pinched or homes are sitting empty, those things aren’t moving.

When it reports — Tuesday

What the experts say — Analysts expect profit of 53 cents per share, excluding one-time charges. That’s 34 percent lower than the year-ago quarter.

You’ll know the economy is improving if — Shipping volume picks up. Volume tends to improve before the broader economy, as manufacturing lines start moving again. The lead time can be anywhere from a few months to a year.

You’ll know the economy isn’t improving if — Shipments of core commodities such as lumber and automobiles, chemicals and agricultural products remain sluggish — that means demand is still frozen. The Association of American Railroads said total volume in the first week of the second quarter fell 19.1 percent from a year earlier, comparable with previous weeks this year.

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OTTAWA – The pension plan at Canada Post lost 19.3 per cent in 2008, hammered by the financial and economic turmoil in Canada and around the world.

The plan held total net assets of $11.71 billion at Dec. 31, 2008, compared with $14.67 billion at the end of the previous year.

The Canada Post pension plan ended 2008 with an estimated solvency deficit of $1.19 billion, representing a solvency funding ratio of 91 per cent.

However, chief investment officer Douglas Greaves said the plan was fully funded on a going-concern basis, with an estimated surplus of $675 million totally free credit score.

"While the short-term impact on investment returns has been negative, the plan is designed to achieve the long-term returns required to fund pension benefits for members, retirees and beneficiaries," Greaves said in a statement.

The Canada Post pension plan is a defined benefit plan that provides inflation-protected benefits to almost 80,000 active members, retired members, deferred pensioners and beneficiaries.

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Aluminum producer Alcoa Inc reported a second consecutive quarterly loss on Tuesday, as metal prices and the autos industry slumped and global demand fell in the economic downturn.

In response to the tough times, Alcoa — the first member of the Dow Jones Industrial Average .DJI to report — has cut thousands of jobs, slashed its dividend, trimmed spending and raised $1.3 billion to help it through the slowdown.

“There’s no doubt in my mind that we are in for a really nasty earnings season,” said Keith Wirtz, president and chief investment officer of Fifth Third Asset Management. “Alcoa’s second consecutive quarterly loss is testament to that. We are in the worse phase of this recession right now.”

But on a conference call with Wall Street analysts, Alcoa Chief Executive Officer Klaus Kleinfeld was more upbeat, despite weakness in demand from industries it supplies.

“In the U.S., we are seeing the first signs of markets stabilizing at lower levels,” he said.

Auto industry demand is down 18 percent globally and is worse in the United States, he said, “but the U.S. residential (construction) market might see some signs of bottoming out.”

But Kleinfeld repeated his forecast that global aluminum consumption will decline 7 percent this year, although he is hopeful government stimulus action will revive metal demand.

Alcoa’s first-quarter net loss was $497 million, or 61 cents per share, compared with a profit of $303 million, or 37 cents, in the 2008 quarter, the Pittsburgh-based company said direct faxless payday loans. The loss from continuing operations was 59 cents per share.

Revenue fell 36 percent to $4.1 billion from $6.5 billion a year earlier after excluding divested businesses.

According to Reuters Estimates, the company actually lost 60 cents per share, excluding a write-off and gain from two transactions in the quarter. That missed analysts’ estimate for a loss of 55 cents, Reuters Estimates said.

TRIMMING THEIR SAILS

Kleinfeld said in a press statement the steps the company has taken so far to cut costs should significantly improve its profitability and cash flow in 2009 and beyond.

“We also see both near-term and long-term catalysts that should improve the prospects for the aluminum industry,” he said. “Current stimulus programs that target infrastructure and energy efficiency will create a demand for … aluminum.

But Alcoa expects second-quarter alumina production to drop slightly as it cuts refinery production to meet smelter demand. Alumina, refined from bauxite, is smelted into aluminum.

The company also sees continued end market weakness for its flat-rolled products in the aerospace, construction and global transportation sectors in the second quarter. 

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It’s often said that business and industry should take advantage of economic downturns by investing in technologies and equipment that improve their operational efficiency.

The idea is that such enterprises can emerge stronger and better positioned to benefit from an economic recovery.

There’s no reason why homeowners can’t embrace the same kind of thinking.

In an effort to stimulate consumer spending, both the provincial and federal governments have increased rebates on appliances and certain renovations that make a home more energy efficient. On top of that, some utilities are offering their own incentives.

Take something as simple as hot water, which depending on the family can account for between 20 and 30 per cent of a home’s overall energy consumption. Big families with teenagers who like to take long, hot showers should take note.

Natural gas is generally considered the most efficient and inexpensive way to heat water. And the recession has made it cheaper. It was only nine months ago that natural gas was trading around $13 (U.S.) per million British thermal unit, but a decline in economic activity and demand for fuel has caused the price to fall below $4.

Deflation is great for the consumer, but it also doesn’t last forever. As soon as the economy begins to recover it’s expected that natural gas prices will rise again. Industry will be using more of it. New power plants will emerge that use huge amounts of natural gas. And, of course, Canada’s own oil sands – a heavy user of natural gas – will return to rapid growth.

The Ontario government’s blended sales tax will also go into effect on July 1, 2010, after which natural gas consumers used to paying only GST will have to pay a harmonized 13 per cent tax.

The good news is that you have the next year to lower your natural gas consumption at a time when the incentives are unprecedented.

Last week, the federal government announced it would increase its existing EcoEnergy home-retrofit rebates by 25 per cent or, as you’ll see in the case of solar hot water, much more. You can find the list of incentives at this online shortcut: tiny.cc/T7P9k. The province told the Star it plans to match the increase, so this article will operate on that assumption.

Federal rebates now range from $315 to $375. Add in the provincial rebate and you’re looking at getting back $750. And if you get the system installed before Aug. 31, Enbridge Gas customers can get back another $300 on most brands that are purchased or rented. See www.enbridge.com/tankless.

The bottom line: If you’re a household that uses a lot of hot water, a tankless water heater can save you $50 a month and pay for itself in as little as three years health insurance.

• Drain-water heat recovery – Another way to lower natural gas use is to capture and recycle waste heat that goes down drains, particularly the hot water that goes down the shower drain.

A drain-water heat recovery system, such as the PowerPipe system offered by Waterloo-based Renewability Energy, is basically a section of copper pipe attached to your basement drainpipe that has copper tubing wound tightly around it.

Cold water flows into the tubing when, say, someone turns on the shower. As the cold water flows around the tubing and climbs up the length of the drainpipe it captures heat from the hot water that’s draining from the bathtub.

The pre-heated water then flows into your hot-water tank for storage. Your tank doesn’t have to work as hard and burns less natural gas – between 20 and 30 per cent less.

You can expect to pay between $900 and $1,200 for the purchase and installation of a drain-water heat recovery system. The federal government will give you a rebate of $95 or $165, depending on the model’s efficiency. Matched by the province, that amounts to between $190 and $330.

Union Gas customers can get a $450 rebate if they install, before Dec. 15, a qualifying system that’s a minimum of 122 centimetres long. You can find the rebate coupon at: go2cut.com/Gv.

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Shares of BlackBerry maker Research In Motion() jumped more than 20 percent on Friday, a day after the company surprised investors with a strong profit report and a rosy outlook for its smartphones despite a grim economy.

RIM shares rose C$13.61 to C$74.60 on the Toronto Stock Exchange shortly after the opening bell. On the Nasdaq, the stock shot up $10.29 to $59.38.

In results that seemed to defy the global economic meltdown, RIM said retail demand was stronger than it expected after the holiday season, partly due to big promotions from phone companies.

The company’s forecast also exceeded analysts’ expectations. RIM said it expects first-quarter sales of $3.3 billion to $3.5 billion, earnings per share of 88 cents to 97 cents and gross margin between 43 and 44 percent. It also expects to add between 3.7 million and 3.9 million subscribers.

Gross margins are currently at about 40 percent.

Many analysts raised their earnings estimates and stock targets to reflect the recovery in growth and margins. For example, Caris & Company analyst Robert Cihra hiked his estimates for the year and raised his stock price target to $80 from $60 affordable car insurance.

In the fourth quarter, RIM’s profit rose to $518.3 million, or 90 cents a share, from $412.5 million, or 72 cents a share, a year earlier. It added 3.9 million subscribers for a total of about 25 million subscribers.

“This quarter affirms RIM’s solid fundamentals and competitive advantages, which we expect will boost RIM’s global share gains versus incumbent handset vendors,” RBC Capital Markets analyst Mike Abramsky said in a note. He raised his stock price target to $80 from $75 and maintained his “outperform” rating.

Analysts had previously worried about RIM’s ability to maintain momentum during the recession, a concern fed by the company’s February 11 profit warning.

Paradigm Capital analyst Barry Richards said that the results and forecast “should alleviate all concerns over RIM’s ability to recover lost gross margins and to continue growing the business profitably.”

($1=$1.24 Canadian)

(Reporting by Wojtek Dabrowski and Susan Taylor; editing by Peter Galloway)

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President Obama said Wednesday world leaders meeting at the G-20 summit "cannot afford half-measures" as they try to hammer out ways to address the global financial crisis.

Speaking after a morning meeting with British Prime Minister Gordon Brown, on his first overseas trip as president, Obama said G-20 delegates have "a responsibility to act with a sense of urgency" and come up with "tough new rules" for managing the world economy.

"We’ve passed through an era of profound irresponsibility," Obama said at a joint news conference. "Now, we cannot afford half-measures and we cannot go back to the kind of risk-taking that leads to bubbles that inevitably burst. So we have a choice: We either shape our future or let events shape it for us."

Leaders from the Group of 20, which represents the world’s leading industrial and emerging economies, will be meeting Thursday in London for a summit with financial chiefs.

Obama said the summit cannot solve all the world’s problems, but it can make "real and unprecedented progress."

The two leaders praised the continuation of the "special relationship" between Britain and America, with Brown calling it resilient and constant.

"Ours is not an alliance of convenience — it’s a partnership of purpose," Brown said business card design.

Brown called on world leaders to cooperate in achieving five tasks at the one-day summit, starting with restoring growth to emerging market economies and agreeing to "clean up" the global banking system.

There will be no sustainable recovery until a new regulatory system for the banks is put in place, Brown said.

Leaders must also commit to whatever is necessary to bring about the resumption of growth, Brown said. They must kick-start global trade and resist protectionism, he said, and lastly, they must make sure that economic recovery is low-carbon and sustainable so as to protect the environment.

"We have some tough negotiations ahead," Brown said. "It will not be easy, but … the world does want to come together."

Obama called on leaders to reject protectionism, support emerging markets, and put in place a sustainable financial structure.

"We have a responsibility to coordinate our actions and find a common ground, not to focus on our differences," Obama said.

The president added he is "absolutely confident" the meeting will reflect "enormous consensus" about the steps that are needed. 

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Bank regulators closed a Georgia-based bank Friday, marking the 21st bank to be shuttered this year, according to a statement from the FDIC.

Earlier in the afternoon, the Office of the Comptroller of the Currency (OCC) announced that the Federal Deposit Insurance Corporation (FDIC) was named the receiver for the Omni National Bank, based out of Atlanta, Ga.

The FDIC entered into an agreement with the SunTrust Bank, also based in Atlanta, Ga. to protect the depositors.

The FDIC expects the cost to its Deposit Insurance Fund to be $290 million.

The failed Omni National Bank had $956 million and total deposits of $796.8 million as of March 9, 2009, according to the FDIC.

Omni National Bank, founded in 2000, had six full service branches located in Atlanta and Dalton, Ga.; Chicago, Ill.; Tampa, Fla; and Houston and Dallas, Texas.

SunTrust Bank (STI, Fortune 500) will operate the six former branches of Omni National through April 27, 2009. During the month-long transition period, banking activities will operate normally.

At the end of the 30 days, all the branches of the failed bank will close. Depositors in Georgia and Florida can open an account with SunTrust or terminate their account and receive a check, according to the FDIC. Customers of those branches will automatically be transferred to SunTrust if they do not make a decision otherwise.

Meanwhile, customers of the failed bank branches in Illinois or Texas who have not closed their accounts will automatically get a check mailed to them.

According to the FDIC, the temporary arrangement with SunTrust bank allows for uninterrupted service with direct deposits and gives customers a cushion of time to find a new bank.

The FDIC fully insures individual accounts up to $250,000 through the end of 2009. At the time of the Omni National Bank closing, however, there were around $2 million in deposits that potentially exceeded the insurance limits, according to the FDIC, although those estimates will likely change as further information comes in from customers.

Brokered accounts are considered separately. The FDIC will pay the $320.1 million in brokered deposits directly to the brokers for the total of their insured funds.

The failed bank also had two loan production offices, one located in Birmingham, Ala. and another in Philadelphia, Pa cashadvance.

Federal regulators said they took control of Omni after the OCC found "the bank had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices." The OCC also found that the bank has "depleted most of its capital," and that it couldn’t "become adequately capitalized without Federal assistance."

Banks fall like flies

So far in 2009, 21 banks have been shuttered. Last week, three banks were closed.

Twenty five banks failed in 2008, crippled in the wake of the housing meltdown. Plummeting home prices rendered a slew of subprime mortgages nearly worthless. As the recession took hold, unemployment surged, and default rates on loans - for homes, autos, and on credit cards - increased, further squeezing banks.

Plagued with toxic assets on their books and increasing default rates, banks started hoarding cash. With banks scared to lend money, credit pipelines virtually dried up, which only served to accelerate the rate at which the economy fell into recession.

On Monday, Treasury Secretary Timothy unveiled details of his plan to take those toxic assets off the balance sheets of banks, giving them the confidence to lend again. Geithner alluded to the plan in broad strokes last month, but investors were skeptical until they heard more specifics about the plan.

Under the new so-called "Public-Private Investment Program," taxpayer funds will be used with private investors cash to buy up toxic assets backed by mortgages and other loans. The goal of the plan is to cover at least $500 billion of assets and loans.

The FDIC has been charged with the task of overseeing the toxic-asset plan that Geithner introduced. The FDIC has already been hit hard by the increase in bank failures, and the increased rate of failures has put pressure on the FDIC’s funds.

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