bank failures

FDIC Problem Bank List Grows to 884

The FDIC announced the problem bank list, which is one step from walking the plank, being seized and shut down, grew to 884 from 860 in Q4 2010. Problem banks are now 11.5% of the 7,657 banks and savings institutions covered by the FDIC.

From the FDIC press release:

The number of institutions on the FDIC's "Problem List" rose from 860 to 884. Total assets of "problem" institutions increased to $390 billion from $379 billion in the prior quarter, but are below the $403 billion reported at year-end 2009. The rate of increase in the number of "problem" banks has declined in each of the past four quarters. Thirty insured institutions failed during the fourth quarter, bringing the total number of failures for the full year to 157.

The FDIC believes bank failures in 2011 will be less than the 157 of 2010. To date, there have been 22 bank failures in the first 7 weeks of 2011. Projecting the current 2011 closure rate onto all of 2011 would be 167. Wikipedia is keeping a tally of closed banks. This time last year, we had 20 bank failures.

The Deposit Insurance Fund is still in the red and went from a negative balance of -$8 billion to -$7.4 billion.

Here's the weird story. While bank failures and problem banks sprout up like mushrooms, the FDIC is reporting record Q4 profits of $21.7 billion. In Q4 2009, the aggregate commercial banks reported a $1.8 billion dollar loss.

Bank Failure Friday - The First Crop of the 2011 Class

It's a new year so the count of bank failures starts all over. The honors for being the first FDIC bank seizures of 2011 go to:

  1. First Commercial Bank of Florida, Orlando, Florida, $78.0 million
  2. Legacy Bank, Scottsdale, Arizona, $27.9 million

The above includes the banks' cost estimates to the FDIC deposit insurance fund. For 2010, there were 157 bank failures.

Bank Failure Friday -

The reason the FDIC releases bank failures on Friday is to avoid a panic. They also stagger the ones they are closing over time. We have had routine bank failures every Friday for the last two years. This week's bank failure lucky winners, along with their cost to the Deposit Insurance Fund are:

Bank Failure Friday - Two for the Road

Another Friday, another round but instead of happy hour, we have bank failures. These week's lucky winners, with their costs to the FDIC deposit insurance fund, are:

  1. Wakulla Bank, Crawfordville, Florida, $113.4 millio
  2. Shoreline Bank, Shoreline, Washington, $41.4 million

Yes, it's October 1, the end of TARP and we have over 120 deadbeat banks, not paying TARP dividends.

One hundred and twenty seven TARP recipient banks have missed dividends or have failed by the time of the August 2010 dividend. There were only 707 banks in the TARP program that received capital injections. Thus, greater than one in six missed their dividends or interest in August 2010. These banks receive $6.939 billion in taxpayer bailout monies.

Now check out this Zacks report, basically saying any bank on the problem list is a dead bank walkin'. Lovely.

In the second quarter of 2010, the number of banks on the FDIC's list of problem institutions grew to 829 from 775 in the previous quarter and 416 in the year-ago quarter. This is the highest since the savings and loan crisis in the early 1990s.

Bank Failure Friday - just a small one

Bank Failure Friday has just one reporting this week.

Pinehurt Bank, Minnesota. Cost to the FDIC: $6 million.

The FDIC also released it's quarterly report. A negative $20.7 billion in the deposit insurance fund was considered a positive.

The number of institutions on the FDIC's "Problem List" rose to 775, up from 702 at the end of 2009. In addition, the total assets of "problem" institutions increased during the quarter from $403 billion to $431 billion. These levels are the highest since June 30, 1993, when the number and assets of "problem" institutions totaled 793 and $467 billion, respectively, but the increase in the number of problem banks was the smallest in four quarters. Forty-one institutions failed during the first quarter. Chairman Bair noted that the vast majority of "problem" institutions do not fail.

The Deposit Insurance Fund (DIF) balance improved for the first time in two years. The DIF balance – the net worth of the fund – increased slightly to negative $20.7 billion, from negative $20.9 billion (unaudited) on December 31, 2009. The fund balance reflects a $40.7 billion contingent loss reserve that has been set aside to cover estimated losses. Just as banks reserve for loan losses, the FDIC has to set aside reserves for anticipated closings. Combining the fund balance with this contingent loss reserve shows total DIF reserves of $20 billion. Total insured deposits increased by 1.3 percent ($70.0 billion) during the first quarter.