The Federal Deposit Insurance Corporation (FDIC)
Editor's Note- For earlier articles on this topic which are included in our article on the Pension Benefits Guaranty Corporation please go to the article the Pension Benefits Guaranty Corporation (PBGC) and the Federal Deposit Insurance Corporatin (FDIC).
(1/29/12)- Banking officials closed 4 more banks this week, including two in Tennessee and one in Florida and Minnesota. This brings the total number of bank closures, so far this year, to 7 versus the 11 banks that were closed at this point in time a year ago. Among the banks closed this week was the Tennessee Commerce Bank, of Franklin Tennessee, which was the first bank closed this year with over a billion dollars in assets and deposits.
As of September 30, 2011, the one branch Tennessee Commerce Bank had about $1.185 in total assets, and $1.156 in total deposits.
The FDIC estimates that the 4 banks that were closed this week will cost the Deposit Insurance Fund (DIF) $607 million.
(1/23/12)- As of January 23, 2011 banking regulators had closed 7 banks last year. On Friday, the first 3 bank closures for 2012 were announced. We will continue to compare the number of closures in 2012 as opposed to 2011, so that our viewers can see how the banking situation continues to improve. Please keep in mind that 92 banks were closed in 2011, and 157 banks were closed in 2010.
This week's closures included banks in Florida, Georgia and Pennsylvania. These closures will cost the FDIC's Deposit Insurance Fund (DIF) a total of $243.8 million.
(1/9/12)- An analysis of bank failures conducted by the Wall St. Journal concluded that the number is down, at least in part, because the weakened banks are not being closed as rapidly as they were before.
Weak banks are staying alive for longer periods in undercapitalized condition and they are in weaker condition when they fail then prior hereto. The study also concluded that smaller banks are weaker than the larger banks.
Banking regulators deny that they are keeping troubled banks alive longer today than in the past. With an improving economy, the banking industry has more time to fix their problems and raise capital on their own. It also appears that the housing market has bottomed out and is beginning a slow tortuous upturn.
"If we believe there's a realistic chance… we're more willing to let then get that capital raise," said Kris Whittaker, deputy comptroller for special supervision at the Office of the Comptroller of the Currency, one of the main federal banking regulators.
(1/1/12)- The final total is in, and the number of bank closures by banking regulators stood for 2011 at 92. There were 157 banks that were closed in 2010, which represents the high-water mark, in contrast to the 140 banks that were closed in 2009..
The number of banks on the fed's "problem bank list" stood at 844 at the end of the third quarter this year, which is the latest quarter for which that list is presently available, down from the 865 on the list for the prior quarter.
(12/23/11)- It had been almost a month since banking regulators last closed a bank, but that streak came to an end Friday, December 16thwhen 2 banks were closed. That brought the total number of bank closures, so far this year, up to the 92 mark versus the 157 banks that were closed in 2010. One of the banks closed was in Florida, with the other bank being located in Arizona.
The closure of these two banks will cost the Deposit Insurance Fund (DIF) an estimated $68.8 million when taken together.
(12/16/11)- The Federal Deposit Insurance Corporation (FDIC) civilly sued 3 former officials of Washington Mutual Inc.and their wives in federal court in Seattle in March, accusing them of taking excessive risks for the bank's investments and thus reaping the benefits if the strategy worked when they received their perfomance bonus. If the strategy did not work, they still would receive a large payday, even though the bank would lose money
The excessive risks, which eventually caused the downfall of the bank worked at first, and therefore enhanced the pay of these officials. The executives and their wives were former Chief Executive Kerry Kilinger, ex-president Stephen Rotella and David Schneider, the bank's former home-loans president.
The lawsuit sought to recoup $900 million from the defendants. The three defendants received a total of $95 million in compensation between 2005 and 2008 according to the suit.
The lawsuit is being settled for less than $75 million, of which the largest amount of money would come from the company's insurance and the bank's estate. The defendants will pay out about $400,000 but won't admit or deny any wrongdoing. They also agreed to forgo some of the benefits that had accrued for them.
The Justice Department had already closed its criminal case against the officials earlier this year. The FDIC did not lose any money in this matter because the bank was sold to J.P.Morgan & Co., so the agency will not receive any portion of the settlement money. The money will go towards the claims of the creditors of the bank.
The FDIC's board has authorized lawsuits seeking total damage claims of at least $7.6 billion against 373 individuals who were involved with 41 failed institutions.
The Washington Mutual insurance fund had previously been tapped earlier this year during a $208.5 million settlement of a separate shareholder class action lawsuit against former executives, directors and other defendants.
(12/3/11)- For the second week in a row, banking regulators did not close any banks this week. Thus, the total number of bank closures still stands at 90 so far this year, compared to the 157 that were closed last year.
With the unemployment rate having dropped to 8.6% for the month of November, compared to the 9.0% in October, it now stands at the lowest level in the last 2 1/2 years.
The number of banks on the FDIC "problem bank" list having dropped to 844 for the latest reporting quarter, from 865 the previous quarter, the health of our banking sector continues to gradually, ever so gradually, improve.
(11/26/11)- At the end of the third quarter there were 844 "problem" banking institutions, down from the 865 problem institutions at the end of the second quarter, and the 888 on the list at the end of the first quarter, as reported by the Federal Deposit Insurance Corporation. Names of the banks on the list are withheld.
In the third quarter there were 26 bank failures and 21 banks dropped off the list.
FDIC-insured institutions posted net income of $35.3 billion in the third quarter, an increase of $11.5 billion, or 48% compared to a year earlier. The profits were at the highest level since the second quarter of 2007.
The agency said that the amount of loans and leases that were non-current, meaning that they were 90 days of more past due, or in non-accrual status, declined during the quarter by $10.5 billion, or 3.3%.
Net operating revenue was 0.5% higher than the year-ago period. Non-interest income, in decline in each of the past 6 quarters, was up by $3.2 billion.
(11/22/11)- Financial regulators closed two more banks on Friday bringing the total number of banks closures so far this year to 90 versus the 157 banks that were closed in 2010.
(11/13/11)- The one branch Community Bank of Rockmont, Rockmont, Ga. became the 88th bank closed by financial regulators this year. The bank had $62.4 million in assets and $55.9 million in deposits, as of June 30th 2011. Its failure will cost the Deposit Insurance Fund (DIF) $14.5 million.
(11/6/11)- With the closing of two more banks on Friday, the total number of banks closed so far this year is now at 87 as of November 4th, compared to the total number of closings in all of 2010 standing at 157. From this point forward we will not list the individual banks that are closed each week unless its total deposits or assets exceed $1 billion. In order to cut down on the length of this article we will also remove the individual bank names that were listed in the weekly closings shortly.
If you need to know the name of the individual bank that is closed each week please go to the FDIC site at fdic.gov.
(10/31/11)- The All America Bank, Des Plains, Illinois became the 85th bank to be closed this year by banking regulators. The sole branch of All America had approximately $33.4 million in total assets and $33.4 in total deposits as of June 30, 2011. It failure will cost the Deposit Insurance Fund $6.5 million.
Last year there were a total of 157 banks closed by financial regulators, compared to the 85 closures as of October 28th this year.
(10/26/11)- With the closing on Friday of 4 more banks by regulators the total number of closures now stands at 84. Included in the banks closed was the 40 branch Community Banks of Colorado, Greenwood, Colorado. As of June 30, 2011, the Community Banks had about $1.38 billion in total assets and $1.33 billion in total deposits. Its failure will cost the Deposit Insurance Fund (DIF) $224.9 million.
The Community Capital Bank of Jonesboro, Georgia had two branches with total assets of $181.2 million, and total deposits of $166.2 million as of June 30, 2011.Its failure will cost the Deposit Insurance Fund (DIF) $62.0 million.
The Decatur First Bank of Decatur, Georgia had 5 branches with about $191.5 million in total assets and$179.2 in total deposits as of June 30, 2011. Its failure will cost the Deposit Insurance Fund (DIF) $32.6 million.
The seven branches of Old Harbor Bank, Clearwater, Florida had about $215.9 million in total assets and $217.8 in total deposits as of June 30, 2011. Its failure will cost the Deposit Insurance Fund (DIF) $39.3 million.
(10/20/11)- Regulators closed four more banks on Friday, bringing the total number of closures so far this year up to 79.
The 2 branch Piedmont Community Bank, Grey, Georgia had approximately $201.7 in total assets, and $181.4 million in total deposits as of June 30, 2011. Its failure will cost the Deposit Insurance Fund (DIF) $71.6 million.
The 2 branch Blue Ridge Savings Bank, Inc. of Asheville, N.C. had approximately $161.0 in total assets, and $158.7 million in total deposits as of June 30, 2011. Its failure will cost the Deposit Insurance Fund (DIF) $38.0 million.
The 2 branch First State Bank, Cranford, N.J.. had approximately $204.4 in total assets, and $201.2 million in total deposits as of June 30, 2011. Its failure will cost the Deposit Insurance Fund (DIF) $45.8 million.
The 2 branch Country Bank, Aledo, Illinois had approximately $190.6 in total assets, and $167.5 million in total deposits as of June 30, 2011. Its failure will cost the Deposit Insurance Fund (DIF) $66.3 million.
(10/15/11)- In another indication that the banking crisis is ebbing, the Federal Deposit Insurance Corporation (FDIC) announced that it plans to close 2 of the 3 temporary field offices it set up to handle the increase in bank failures that have occurred in the last few years.
As of June 30, the agency had 865 banks on its "problem list". As of that date there were 7,513 FDIC-insured institutions. The agency started creating these temporary offices in late 2008 to handle the spike in work for its staff that handles bank resolutions and receiverships. The 3 offices were in regions hit hardest by the failures: the West, the Midwest and the Southeast.
The temporary office in Irvine, California will close in January 2012 and the Schaumburg, Ill., office will close in September 2012.
The third temporary office, in Jacksonville, Fla., will remain open at least through late 2013 due to the large number of bank failures still pending in that area of the country.
(10/11/11)- With banking regulators having closed two more banks on Friday, the total number of bank closures so far this year now stands at 75 versus the 157 banks that were closed in all of 2010.
The 6 branch RiverBank, Wyoming, Minnesota had approximately $417.4 million in assets and $379.3 million in deposits as of June 30, 2011. Its failure will cost the Deposit Insurance Fund (DIF) an estimated $71.4 million.
Sun Security Bank, Ellington, Missouri, a 27-branch bank was also closed on Friday by banking regulators. As of June 30, 2011 it had about $355.0 million in total assets and about $290.4 million in total deposits. Its failure will cost the Deposit Insurance Fund (DIF) an estimated $118.3 million.
(10/3/11)- The seven branch First International Bank, Plano, Texas became the latest banking casualty this year, bringing the total number of closures this year up to 73.
As of June 30, 2011, First International had about $239.9 million in total assets and $208.8 million in total deposits. Its failure will cost the Deposit Insurance Fund (DIF) an estimated $53.8 million.
(9/25/11)- The Virginia State Corporation Commission closed the 2l branch Bank of the Commonwealth, Norfolk, Virginia,, and the Federal Deposit Insurance Corporation (FDIC) was appointed as receiver. The bank reopened Saturday as branches of Southern Bank and Trust, Mount Olive, North Carolina.
As of June 30, 2011, the Bank of the Commonwealth had about $985.1 million in total assets and $901.8 million in total deposits. Its failure will cost the Deposit Insurance Fund (DIF) an estimated $268.3 million.
(9/11/11)- The Senate Banking Committee cleared the nomination of Martin Gruenberg to lead the Federal Deposit Insurance Corporation. The nomination now goes before the full Senate for approval, but because of the 60 votes that would be needed to block a filibuster, his nomination may not make it through that legislative body.
The eight branch The First National Bank of Florida, Milton, Florida became the 70th banking failure in this country this year. Last year there were 157 banking failures.
As of June 30, 2011, The First National Bank of Florida had about $206.8 million in total assets and $280.1 million in total deposits. Its failure will cost the Deposit Insurance Fund (DIF) an estimated $46.9 million.
(9/4/11)- The one branch Patriot Bank of Georgia (Cummings, Georgia), and the two branch CreekSide Bank (Woodstock, Georgia) became the 68th and 69th bank failures so far this year.
As of June 30, 2011, Patriot Bank of Georgia had about $150.8 million in total assets and $111.2 million in total deposits, and Creekside Bank had total assets of $102.3 million and total deposits of $96.6 million.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for Patriot Bank of Georgia will be $44.4 million, and for Creekside Bank $27.3 million.
There were a total of 157 bank failures in 2010.
(8/25/11)- Slowly, ever so slowly, the nation's banking system's financial health continues to improve. There are several data points showing that this is happening including the fact that the number of problem banks on the Federal Deposit Insurance Corporation's ( FDIC) list declined to 865 in the second quarter of 2011, from 888 in the first quarter.
This was the first time there was a decline in this list in 15 quarters. The FDIC's insurance fund for failed banks, the Deposit Insurance Fund (DIF) showed a surplus for the first time in two years. It stood at $3.0 billion, compared with a negative $1 billion balance at the end of the first quarter.
Much of the surplus is due to the fact that banks prepaid some of their premiums that would be due in latter years, and also because the cost of premiums was raised by the agency.
The nation's 7,513 banks and savings institutions reported a total profit of $28.8 billion in profits for the second quarter, up nearly 38% from a year ago, and the eighth consecutive quarter of earnings increases.
Bank loan balances rose for the first time since the second quarter of 2008
(8/23/11)- The 5 branch Lydian Private Bank, of Palm Beach Florida which had total assets of about $1.70 billion, and total deposits of about $1.24 billion as of June 30, 2011 was one of the four banks closed on Friday bringing the total of closed banks to 67 so far this year, versus the 157 banks closed in all of 2010.
The Lydian bank closing will cost the Deposit Insurance Fund (DIF) $293.2 million.
The one branch First Choice Bank of Geneva, Illinois, which was closed Friday, had about $141.0 million in assets and about $137.2 million in deposits as of June 30, 2011. Its failure will cost the DIF $31.0 million.
First Southern National Bankk of Statesboro, Georgia had one branch with about $164.5 million in total assets and $159.7 million in total deposits as of June 30, 2011. The FDIC estimates the closing will cost the DIF $39.6 million.
The Public Savings Bank of Huntington Valley, Pennsylvania had one branch with about $46.8 million in total assets and $45.8 million in total deposits as of June 30, 2011.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $11.0 million.
(8/14/11)- The 6 branch First National Bank of Olathe, Olathe, Kansas became the 64th bank closed this year by banking regulators. As of June 30,2011, First National had about $538.1 million in total assets, and $524.3 million in total deposits.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $116.6 million.
(8/7/11)- With the closing of two more banks on Friday by banking regulators, the total number of banks closed so far this year now stands at 63 as opposed to the 157 banks closed in all of 2010.
The twenty branch Bank of Whitman, Colfax, Washington had about $548.6 million in total assets and $515.7 million in total deposits as of June 30, 2011. The FDIC estimates the closure will cost the Deposit Insurance Fund (DIF) $134.8 million.
The three branches of the Bank of Shorewood, Shorewood, Illinois, had about $110.7 million in total assets and $104.0 in total deposits as of June 30, 2011. The FDIC estimates the closure will cost the Deposit Insurance Fund (DIF) $25.6 million
(7/30/11)- Banking regulators closed 3 more banks on Friday bringing the total number of closures up to 61 so far this year. The Integra Bank, National Association of Evansville, Indiana was closed by the Office of the Comptroller of the Currency, and its 52 branches will reopen Saturday as branches of Old National Bank of Evansville, Indiana.
It is one of the largest closures since Integra had about $2.2 billion in total assets and about $1.9 billion in total deposits as of March 31, 2011. The FDIC estimates the closure will cost the Deposit Insurance Fund (DIF) $170.7 million.
The Virginia Business Bank of Richmond Virginia with one branch had about $95.8 million in total assets and $85.0 million in total deposits, as of March 31, 2011. The FDIC estimates the closure will cost the Deposit Insurance Fund (DIF) $17.3 million.
The BankMeridian, N.A. of Columbia, S.C. had 3 branches with about $239.8 million in total assets and $215.5 million in total deposits as of March 31, 2011. . The FDIC estimates the closure will cost the Deposit Insurance Fund (DIF) $65.4 million.
(7/23/11)- In our item dated 7/13/11 below we wrote: " Last year there were 19 banks that failed that had over a billion dollars in assets, while there have been only three with over a billion in assets that have failed so far this year." Well with the closing of 3 more banks on Friday by banking regulators bringing the total to 58 closed banking institutions so far this year, include one more in the over billion category.
The 17 branches of Bank of Choice, of Greeley, Colorado had a total of $1.07 billion in assets and $924.9 million in deposits as of March 31, 2011. Its closure will cost the Deposit Insurance Fund (DIF) $213.6 million.
The 2 branch Southshore Community Bank of Tampa, Florida and the 6 branch LandMark Bank of Sarasota, Florida were also closed on Friday by banking regulators. Southshore had about $46.3 million in total assets and $45.3 million in total deposits as of March 31, 2011. Its closure will cost the DIF will be $8.3 million.
Landmark had total assets of about $275.0 million and $246.7 million in total deposits as of March 31, 2011. Its closure will cost the DIF $34.4 million.
(7/16/11)- Banking regulators announced the closing of two more banks late Friday night bringing the total number of closures this year to 55.
The 6 branch First Peoples Bank of Port Saint Lucie, Florida had about $228.3 million in total assets and $209.7 million in total deposits as of March 31, 2011. It failure will cost the Deposit Insurance Fund $7.4 million.
The one branch Summit Bank of Prescott, Arizona had $72.0 million in total assets and $66.4 million in total deposits as of March 31, 2011. Its failure will cost the Deposit Insurance Fund $11.3 million.
(7/16/11)- Two Georgia banks were closed on Friday by banking regulators, bringing the total number of closures so far this year to 53. The closed banks were the High Trust Bank of Stockbridge, Georgia, and the One Georgia Bank of Atlanta Georgia. All three branches of the two closed banks will reopen during their normal business hours beginning Saturday as branches of Ameris Bank of Moultrie, Georgia.
As of March 31, 2011, High Trust Bank had total assets of $192.5 million and total deposits of $189.5 million. One Georgia Bank had total assets of $186.3 million and total deposits of $162.1 million.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF)) will be $66.0 million for the failure of the High Trust Bank and $44.4 million for the failure of the One Georgia Bank.
(7/13/11)- Not only are the number of banks that are failing decreasing from the previous year, the size of the banks that are failing are smaller than last year also. Last year there were 19 banks that failed that had over a billion dollars in assets, while there have been only three with over a billion in assets that have failed so far this year.
In the first half of this year, the estimated cost to the FDIC's Deposit Insurance Fund was 20.5 cents for every dollar in failed-bank assets, down from 24.1 cents a year earlier.
(7/10/11)- With the closing on Friday of 3 more banks by banking regulators, the toll for the year now stands at 51 bank closures compared to the total of 157 banks that were closed in 2010.
Signature Bank of Windsor, Colorado had three branches with $66.7 million in total assets and $64.5 million in total deposits as of March 31, 2011. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF)) will be $22.3 million.
Colorado Capital Bank of Castle Rock, Colorado had seven branches with $717.5 million in total assets and $672.8 million in total deposits as of March 31, 2011. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF)) will be $283.8 million.
First Chicago Bank & Trust of Chicago, Illinois had seven branches with $858.3 million in total assets and $887.5 million in total deposits as of March 31, 2011. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF)) will be $284.3 million
(7/2/11)- No banks were closed on Friday by financial regulators, thus leaving the total number of closings so far this year at 48 compared to the total of 157 closures for all of 2010. These figures show how the situation is indeed improving.
Sheila C. Bair, the present chairwoman of the FDIC will be stepping down from that position on July 8th to be replaced by Martin J. Gruenberg, the vice-chairman. Ms. Bair steered the agency through one of the most difficult periods in its history, and should be highly commended for her leadership and willingness to take on the vested interests who opposed her.
(6/26/11)- With the closing on Friday by banking regulators of the two branches of the Mountain Heritage Bank of Clayton, Georgia, the total number of banks closed so far this year stands at 48.
As of March 31, 2011 Mountain Heritage Bank had about $103.7 million in total assets and $89.6 million in total deposits.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $41.1 million.
(6/19/11)- Banking regulators closed down 2 more banks Friday evening bringing the total amount of financial institutions closed so far this year to 47 versus the 157 closed in 2010.
The 4 branch McIntosh State Bank of Jackson, Georgia had about$339.9 million in total assets and $324.4 million in total deposits as of March 31, 2011.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $80.0 million.
First Commercial Bank of Tampa Bay, Tampa Bay, Florida had 2 branches with about $98.6 million in total assets and $92.6 million in total deposits as of March 31.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $28.5 million
(6/14/11)- President Barack Obama announced that he would nominate Martin J. Gruenberg, the vice-chairman of the Federal Deposit Insurance Corporation to replace Sheila C. Bair, the present chairwoman who will be stepping down after 5 years in that position.
Mr. Gruenberg, a Democrat, has served as vice-chairman since 2005. Prior to that he worked for more than a decade as a senior counsel to former Senator Paul S. Sarbanes. There are currently two seats on the five-member board of the FDIC that are vacant. The Comptroller of the Currency holds one of those seats and the other is held by the head of the Consumer Financial Protection Bureau, both of which positions are currently unoccupied.
Under past tradition, the replacement of Mr.Gruenberg as vice-chairman will go to a Republican. Thomas J. Curry, a current member of the board of the FDIC is being considered to head the comptroller's office.
(6/5/11)- The three branch bank Atlantic Bank and Trust of Charleston, South Carolina became the 45th financial institution closed by banking regulators so far this year. As of March 31, 2011 Atlantic had about $208.2 million in total assets and $191.6 million in total deposits.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $36.4 million
(5/28/11)- The First Heritage Bank, Snohomish, Washington became the 44th bank closed by banking regulators this year. The bank had 5 branches with $173.5 million in total assets, and $163.3 million in total deposits as of March 31, 2011.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $34.9 million.
(5/27/11)- The number of banks on the Federal Deposit Insurance Corporation's (FDIC) problem bank list increased by only 4 in the first quarter, bringing the total number to 888. That is the smallest increase since the financial crisis began and just another sign of how the nation's financial crisis continues to abate.
The banking industry posted a $29 billion profit in the first quarter, its best quarterly result since the financial crisis began, and a 67% increase from the $17.4 billion it reported in the same period in 2010.
There are now 7,574 financial institutions covered by the FDIC.
Revenues for the industry decreased by 3% over the same quarter last year, and this is only the second time in 27 years that this has happened.
At the end of the quarter the FDIC's insurance fund carried a negative balance of $1 billion, as opposed to the $7.4 billion that it stood in the red at the end of 2010.
Sheila C. Bair, the chairwoman of the FDIC said, "Barring unforeseen circumstances", the federal deposit insurance fund "balance at June 30 should turn positive, after 7 quarters in the red."
(5/23/11)- By the end of May last year, banking regulators had closed 78 banks. With the closure on Friday of 3 banks, the total number of bank closures this year has now reached 43. Yes that is still a very high number of bank closed but it does show the considerable improvement that has taken place in the banking system in the last year.
Summit Bank of Burlington, Washington, with 3 branches was closed on Friday. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $15.7. The bank had about $142.7 million in total assets and $131.6 million in total deposits as of March 31, 2011.
Atlantic Southern Bank of Macon Georgia and First Georgia Banking Company of Franklin, Georgia had 26 branches between the two of them with the resulting loss to the DIF being about $273.5 million for the Atlantic bank closure and $156.5 million for the First Georgia closing.
As of March 31, 2011, Atlantic had total assets of $741.9 million and total deposits of $707.6 million; and First Georgia had total assets of $731.0 million and total deposits of $702.2 million
(5/11/11)- Sheila C. Bair, announced that, effective July 8, she would be stepping down as chairwoman of the Federal Deposit Insurance Corporation (FDIC). President George W. Bush had appointed Ms.Bair to that position in 2006, but her stepping down came as no surprise since she previously had stated that she intended to remain in the position only until her term would expire.
"I don't think these jobs should be forever," she said in a brief interview on Monday. She presided over the agency through the difficult years since 2008, while the banking industry suffered through one of its most difficult periods since the savings and loan scandal of the 1970s.
Martin J. Gruenberg, who is currently the vice-chairman of the FDIC is expected to be nominated to replace her subject to a Senate confirmation process.
The last year and a quarter has seen over 200 banks fail, but hopefully the high tide for the failures is now passed.
Four of the country's top financial regulatory bodies currently do not have leaders. The vacancies are in the top spots at the Office of the Comptroller of the Currency; the Federal Housing Finance Agency, the Federal Reserve's vice chairman for bank supervision, a new post, and head of the Consumer Finance Protection Bureau (CFPB).
Elizabeth Warren was named as acting head of the CFPB, which was a newly created regulatory body under the recently passed Dodd-Frank law, but the Obama administration has not confirmed that it will seek to have her nominated for approval by the Senate for that position.
(5/7/11)- With the closure of the Coastal Bank, Cocoa Beach, Florida, the total number of closed banks this year reached 40. There were 157 banks that were closed by banking regulators last year, so it is clear at this point that there will be less banks closed this year than last.
Coastal had two branches with total assets of $129.4 million and total deposits of $123.9 million as of March 31, 2011.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $13.4 million.
(5/1/11)- Five more banks were closed on Friday by banking regulators, bringing the total number of failed banks to 39 so far this year.
First Choice Community Bank of Dallas, Georgia and The Park Avenue Bank of Valdosta, Georgia had a combined 19 branches with a combined total of $1,261.8 billion in assets and a combined total of $1,137.7 billion in deposits as of December 31, 2010.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for the combined banks will be $398.5 million.
The First National Bank of Central Florida, Winter Park, FL., and the Cortez Community Bank, a division of Premier American Bank, N.A. had a combined 8 branches with a total of $412.9 million of combined assets and $373.5 million of combined deposits as of December 31, 2010.
The FDIC estimated that the cost to the Deposit Insurance Fund (DIF) for the combined banks will be $61.5 million
The fifth bank that was closed was the Community Central Bank of Mount Clemens, Michigan, which had 4 branches with about $476.3 in assets and $385.4 million in total deposits as of December 31, 2010.
The FDIC estimated that the cost to the Deposit Insurance Fund (DIF) for the combined banks will be $183.2 million.
(4/17/11)- The total for this year now stands at 34 U.S. banks that have failed and counting. This compares with the 157 that closed in all of 2010. Of the six that were closed on Friday by banking regulators was one of the larger closures, namely the Superior Bank, based in Birmingham, Ala., with 73 branches, $3 billion in assets and $2.7 billion in deposits, as of December 31, 2010. Its failure will cost the Deposit Insurance Fund (DIF) $259.6 million.
The closing of Birmingham-based Nexity Bank, which had only one branch with $793.7 million in assets and $637.8 million in deposits, as of December 31, 2010 will cost the Deposit Insurance Fund (DIF) $175.4 million.
Bartow County Bank of Cartersville, Ga. had $330.2 million in assets and $305.1 million in deposits as of December 31, 2010 and 4 branches. Its closing will cost the Deposit Insurance Fund (DIF) $69.5 million.
New Horizons Bank in East Ellijay, Ga., had $110.7 million in assets and $106.1 in deposits as of December 31, 2010 and 2 branches. Its closing will cost the Deposit Insurance Fund (DIF) $30.9 million.
Also shut down was the Rosemount National Bank in Rosemount, Minn., with $37.6 million in assets and $36.6 million in deposits as of December 31, 2010 and one branch. Its closing will cost the Deposit Insurance Fund (DIF) $3.6 million. The sixth bank shut down was the Heritage Banking Group based in Carthage, Miss., with 8 branches, $224 million in assets and $196.2 in deposits as of December 31, 2010. Its closing will cost the Deposit Insurance Fund (DIF) $49.1 million.
(4/9/11)- Two more banks were closed by banking regulators on Friday, bringing the total number of bank closures to 28 so far this year.
Nevada Commerce Bank of Las Vegas, Nev. had two branches with about $144.9 million in total assets and $136.4 million in total deposits as of December 31, 2010. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $31.9 million.
Western Springs National Bank and Trust of Western Springs, Illinois had two branches with an estimated $186.8 million in total assets and $181.0 in total deposits as of December 31, 2010. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $31.9 million.$31.0 million.
(3/26/11)- As of January 31, the latest month for which figures are available, the Federal Deposit Insurance Corporation (FDIC) has paid out $8.89 billion to banks under loss-sharing agreements that shield buyers from some of the risk associated with loans inherited from banks that are taken over.
There are presently 236 such deals in place as of January 31, with the FDIC agreeing to assume most future losses on $160 billion in assets. FDIC officials expect to make an additional $21.5 billion in payments from 2011 to 2014.
More than half of that total is predicted for this year, followed by an estimated $6 billion in loss-share reimbursements in 2012. Most financial experts feel that the program saved the government from suffering much worse losses had it not been in effect.
The FDIC's deposit-insurance fund (DIF) had a negative balance of $7.4 billion as of December 31, which was a substantial improvement from the $20 billion hole it was in at the end of 2009.
So far this year, 11 of the failed 26 banks did not require any loan-loss sharing deals.
The 26th bank to fail was The Bank of Commerce, Wood Dale, Illinois, which had only one branch. As of December 31, 2010, The Bank of Commerce had about $163.1 million in total assets and $161.4 million in total deposits. The FDIC estimates that this closure will cost the Deposit Insurance Fund (DIF) $41.9 million.
(3/14/11)- With the closure on Friday of two more banks by banking regulators, the total number of bank closures this year now stands at 26.
The First National Bank of Davis of Davis, Oklahoma had a single office with $90.2 in total assets and $68.3 in total deposits as of December 31, 2010. The FDIC estimates that this closure will cost the Deposit Insurance Fund (DIF) $26.5 million.
The Legacy Bank of Milwaukee, Wisconsin had one branch with total assets of $190.4 million, and total deposits of $183.3 million as of December 31, 2011. The FDIC estimates that this closure will cost the DIF about $43.5 million.
(2/27/11)- Valley National Bank, St. Charles, Illinois became the 24th bank closed so far this year by banking regulators. The five branches had about $123.8 million in total assets and approximately $124.2 million in total deposits. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $22.8 million
(2/25/11)- With the failure of 4 more banks on Friday, two of which were located in Georgia and two in California, the total number of banks closed by banking regulators stands at 22 for the year.
Charter Oak Bank, Napa, California had two branches with about $120.8 million in total assets and $105.3 million in total deposits as of December 31. 2010. The FDIC estimates that the cost to the DIF will be about $21.8 million.
San Luis Trust Bank, FSB, San Luis Obispo, California had one branch with about $332.6 million in total assets and $272.2 million in total deposits as of December 31, 2010. Its failure will cost the DIF about $96.1 million.
Habersham Bank, Clarkesville, Georgia had 8 branches with approximately $387.6 in total assets and $339.9 million in total assets as of December 31, 2010. The FDIC estimated that the cost to the Deposit Insurance Fund (DIF) will be $90.3 million.
Citizens Bank of Effigham, Springfield, Georgia had 4 branches with about $214.3 million in total assets, and $206.5 million in total deposits. The FDIC estimates that the cost to the DIF will be $59 million.
(2/19/11)- The 5-member Board of Directors of the Federal Deposit Insurance Corporation unanimously approved a final rule that will take effect on April 1, 2011 on Assessments, Dividends , Assessment Base and Large Bank Pricing. The rule implements changes to the deposit insurance assessment system mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Dodd-Frank required that the base on which deposit insurance assessments are charged be revised from one based on domestic deposits to one based on assets.
The new fee structure will result in about 110 large banks covering about 80% of the premiums paid into the deposit insurance fund (DIF) each year, up frorm 70%. The fund is expected to collect about $14 billion in premiums this year, but because of the large number of bank failures in the last few years has been running at a deficit.
The new fee rule will not raise any additional money for the fund, but it will shift the collection of premiums to banks with more than $10 billion in assets and away from smaller banks.
The larger banks as a group will pay about 12 percent more in fees, but only about half of them will pay that increase, while the other half will see reduced premiums being assessed against them since low risk securities that they manage for large customers will not be included in the assessment.
Premiums for smaller banks are expected to be reduced on average, by about 30%. Only about 84 of the nations 7,661 smaller banks will have greater fees to pay under the new rule. Please see our item dated 11/18/10 below for more information on this topic.
(2/13/11)- Four more banks failed on Friday bringing the total amount of closures so far this year up to 18. The closed banks were located in California, Wisconsin, Michigan and Florida.
Sunshine State Community Bank of Port Orange, Florida had 5 branches with approximately $125.5 million in total assets and$116.7 million in total deposits as of December 31,2010. Its closure will cost the Deposit Insurance Fund (DIF) about $30.0 million.
Peoples State Bank, of Hamtramck, Mich. had 10 branches with about $390.5 million in assets and $389.9 million in total deposits as of December 31,2010. Its closure will cost the DIF $87.4 million.
Badger State Bank of Cassville, Wis. had one branch with approximately $83.8 million in total assets and $78.5 million in assets as of December 31,2010. Its closure will cost the DIF $17.5 million.
Canyon National Bank of Palm Springs Cal., had 3 branches with about $210.9 million in total assets and $205.3 million in total deposits as of December 31,2010. Its closure will cost the DIF $10.0 million.
(2/6/11)- Banking regulators closed three more banks on Friday, bringing the total number of closures this year up to fourteen. Two of the closures were in Georgia and the other one was in Illinois.
Community First Bank of Chicago, Illinois had one branch, which had about $51.1 million in total assets and an estimated $49.5 million in total deposits as of December 31, 2010. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be about $11.7 million.
The American Trust Bank of Roswell, Georgia had three branches that had an estimated $238.2 million in total assets and about $222.2 million in total deposits as of December 31, 2010. Its closure will cost the DIF about $71.5 million.
The BankSouth, Greensboro, Georgia had two branches with an estimated $153.2 million in total assets and $139.7 million in total deposits as of December 31, 2010. Its closing will cost the DIF an estimated loss of $35.2 million.
(1/30/11)- Eleven is now the total of bank closures in this country that have occurred as of Friday, January 28, 2011, compared to the 157 bank closings that took place in all of 2010. The four bank closings that took place were in Oklahoma, Wisconsin, New Mexico and Colorado.
The First State Bank, Camargo, Oklahoma had one branch, which had $43.5 million in total assets and $40.3 million in total deposits as of September 30, 2010. Its failure will cost the Deposit Insurance Fund (DIF) $20.1 million.
The Evergreen State Bank, Stoughton, Wisconsin had four branches, with total assets of about $246.5 million and total deposits of $195.2 million as of September 30, 2010. Its failure will cost the DIF $22.8 million.
The biggest failure this week was the First Community Bank, Taos, New Mexico, which had 38 branches, with total assets of $2.31 billion and total deposits of $1.94 billion as of September 30, 2010. Its failure will cost the DIF $260.0 million.
The fourth failed bank this week was the FirsTier Bank, Louisville, Colorado, which had total assets of $781.5 million and total deposits of $722.8 million as of September 30, 2010. Its failure will cost the DIF $242.6 million.
(1/23/11)- Four more financial institutions were closed on Friday by banking regulators. With these shutterings, it brings to 7, the number of bank closings so far this year.
The closing of The Bank of Asheville, Ashevelle, N.C., which had 5 branches with a total of $195.1 million in assets and $188.3 million in deposits, as of September 30, 2010 will cost the Deposit Insurance Fund (DIF) $56.2 million.
The closing of United Western Bank of Denver, Colorado., which had 8 branches with a total of $2.05 billion in assets and $1.65 billion in deposits, as of September 30, 2010 will cost the Deposit Insurance Fund (DIF) $312.8 million.
The closing of the Community South Bank and Trust, Easly, South Carolina., which had 6 branches with a total of $440.6 million in assets and $402.4 million in deposits, as of September 30, 2010 will cost the Deposit Insurance Fund (DIF) $46.3 million.
The fourth bank that was closed was the Enterprise Banking Company, McDonough, Georgia which had assets of $100.9 million as of September 30, 2010. No other financial institution assumed either the assets or deposits of Enterprise, so it will go into the FDIC's portfolio.
(1/15/11)- Oglethorpe Bank of Brunswick, Georgia became the 3rd bank closure of the year on Friday. Its two branches will reopen Monday morning as branches of Bank of Ozarks, Little Rock, Arkansas.
As of September 30, 2010, Oglethorpe Bank had approximately $230.6 million in total assets and $212.7 million in total deposits.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $80.4 million.
(1/8/11)- Banking regulators began the year by closing 2 banks on Friday, with one of them being in Arizona and the other bank being in Florida. The final total for the number of banks closed by regulators in 2010 was 157, which surpassed by 17 the total amount of banks closed by regulators in 2009.
The closed bank in Arizona was the Legacy Bank, which was headquartered in Scottsdale, and it had 2 branches. Between the 2 branches they had $150.6 million in assets and $125.9 million in deposits. This failure will cost the Deposit Insurance Fund (DIF) $27.9 million.
The failed First Commercial Bank of Florida, which was headquartered in Orlando, had 9 branches with a total of $598.5 million in assets and $529.6 million in deposits. Its failure will cost the DIF $78 million.
(1/6/11)- The Federal Deposit Insurance Corporation (FDIC) announced that it has authorized its attorneys to seek to recover about $2.5 billion from 109 executives of failed U.S. banks.
The FDIC is permitted under the law to sue officers, directors, accountants and attorneys of failed banks for the losses that the deposit insurance fund incurs as a result of the failure of a financial institution.
The agency said it would pursue the cases "if they are both meritorious and cost-effective". Before doing so it would seek to settle the matter as expeditiously as possible.
(12/26/10)- It turns out that there were 6 banks, not 5 that were closed last Friday December 17th by banking regulators. The sixth bank closed was the First Southern Bank located in Batesville, Ark. Thus the total number of bank closures this year now stands at 157.
(12/20/10)- Banking regulators closed 5 more banks on Friday, bringing the total number of closures so far this year up to 156 versus the 140 closures that took place in 2009. Three of the banks closed were in Georgia, and one each in Florida and Minnesota.
The 140 bank failures in 2009 cost the Deposit Insurance Fund (DIF) about $36 billion, while the 156 bank failures this year have cost the DIF about $21 billion, since the banks that failed this year, on a whole, have been much smaller than those that were closed in 2009.
(12/15/10)- The Office of Thrift Supervision said the nations 741 thrift institutions reported a $1.77 billion profit for the July-September quarter. That was up from the $1.49 billion reported in the 2nd quarter and better than the $1.24 billion in the third quarter of 2009. This was the fifth quarter in a row that the nation's thrift had shown a profit.
The number of "problem" thrifts was at 53 at the end of the 3rd quarter, up from 43 a year earlier, but down from 54 at the end of the 2nd quarter.
(12/12/10)- With the closure on Friday of the Earthstar Bank headquartered in Southampton, PA, and the Paramount Bank of Farmington Hills, MI., the total number of banks that were closed in the U.S. this year now stands at 151. Each of the two closed banks had 4 branches.
The Earthstar closure will cost the Deposit Insurance Fund (DIF) $22.9 million, and the Paramount closure will cost the fund $90.2 million.
(11/26/10)- The FDIC announced that there are now 860 banks on its "problem bank" list as of the end of the September quarter, up from 829 at the end of the June quarter, and 775 at the end of the March quarter. Banking regulators have closed 149 banks so far this year, up from the 140 banks closed in all of last year.
The nation's 7,760 remaining banks made about $14.5 billion in the 3rd quarter, ended September 30, 2010, which was up about $2 billion from the comparable quarter last year, but down sharply from the June quarter of this year. This drop resulted mainly from the reported $10.1 billion loss by Bank of America.
Almost two in three banks posted an improvement in quarterly earning results. It was the second quarter in a row that banks charged off fewer loans in nearly every category. Total loans and leases were essentially flat form a year ago.
The agency has recognized or projected about $80 billion in losses by the end of 2010, with an expected $20 billion more in losses from 2011 through 2014.
(11/18/10)- Under the terms of the Dodd-Frank financial overhaul legislation that was passed this year, the method of assessment of the fees paid to the Federal Deposit Insurance Corporation (FDIC) was changed to the asset base of the banks rather than the amount that a bank held under deposit.
The FDIC five-member board voted to take the initial steps to implement the new fee schedule, and it will go into effect on April 1, 2011.
Smaller banks are dependant on their depositors for funding whereas larger banks have access to other sources of funding, such as the commercial paper market, which for the first time, would count under the new formula.
According to FDIC officials this will mean that large bank's share of deposit-insurance premiums would rise to 80% from 70% under the new system. There are 19 banks covered by the FDIC with $100 billion in assets that will be hit the hardest by the increase.
Industry analysts estimate that the new method for the fee assessment will cost the larger banks over $1 billion in additional costs per year under the new law.
(10/22/10)- The Federal Deposit Insurance Corp. (FDIC) said that it now expected $52 billion in losses, down from the $60 billion that it had predicted in June.
As a result, the staff recommended that the FDIC board reverse its decision to levy a 0.03 percentage-point assessment rate increase, slated to go into effect January 1, 2011. Without the rate increase staffers predicted that the insurance fund could still reach a reserve ratio of 1.15% by the end of 2018.
The Dodd-Frank financial -regulation law requires that the FDIC devise a plan to bring the fund's reserve ratio to 1.35% by September 30,2020.
In a separate action, the board approved an initial plan to set the deposit-insurance fund's long-term designated reserve ratio at 2% ahead of any possible banking crisis.
(10/6/10)- FDIC data shows that bank-industry employment has been cut by 188,000 jobs, or 8.5% since 2007. Failures have cost 11,210 jobs, or 32% of the employees at failed institutions, according to FIG Partners, an Atlanta investment firm that specializes in the banking industry..
With the closure by banking officials of two more banks on Friday, the total number of bank closures this year has now reached 131, bringing the total very close to the 140 closures that took place in all of 2009.
Shoreline Bank, Shoreline, WA had all its deposits assumed by GBC International Bank of Los Angeles, CA., and Wakulla Bank, Crawfordville, FL., had all its deposits assumed by Centennial Bank, Conway, Ark.
(9/29/10)- Now it is the National Credit Administration, the U.S. agency overseeing credit unions, coming to the rescue of three of the nation's largest wholesale credit unions. To help fund the rescue, the National Credit Union Administration plans to issue $30 billion to $35 billion in government guaranteed bonds, backed by the mortgage-related assets of the wholesale credit unions.
Bad gambles on mortgage-backed securities have now killed five of the nation's 27 wholesale credit unions since March 2009. The federal government controls about 70% of the total assets at such credit unions.
Members United Corporate Federal Credit Union in Warrenville, Ill, Southwest Corporate Federal Credit Union of Plano, Tex, and Constitution Corporate Credit Union, Wallingford, Conn., which had a total of $19.67 billion in assets as of July, were taken into conservatorship by federal regulators.
Since the start of 2008, 66 retail credit unions have failed out of the 7,445 federally credit unions. Special assessments will be levied against the surviving credit unions.
Two more banks were closed this past Friday by banking regulators, bringing the total number of bank closures this year to 127.
(9/13/10)- The Federal Deposit Insurance Corporation (FDIC) has closed on a sale of a 40% equity interest in a limited liability company (LLC) created to hold assets with an unpaid principal balance of about $762 million from 20 failed bank receiverships. The winning bidder of the Multibank Structured Transaction (MST) is Mariner Real Estate Partners, LLC, Leawood, Kansas, with a price of 30.93% of the unpaid principal balance.
As an equity participant, the FDIC will retain a 60% stake in the LLC, and share in the returns on the assets. The FDIC as receiver for the failed banks will convey to the LLC a portfolio of about 1,082 distressed residential and commercial acquisition and development loans, of which more than 80% are delinquent.
As the LLC's managing equity owner, Mariner will manage, service and ultimately dispose of the LLC's assets.
(9/11/10)- The Horizon Bank, Bradenton, FL, became the 119th bank closed this year by banking regulators. Most of its $187.8 million in assets, and all of its $164.6 million in deposits were assumed by the Bank of the Ozarks, Little Rock, Ark. The FDIC and the Bank of the Ozarks entered into a loss-share transaction on $150 million of the assets.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $58.9 million
(9/7/10)- For the second week in a row, no banks were closed by banking regulators Friday, leaving the total amount of closures so far this year at 118.
The FDIC announced that there are now 829 banks on its problem list, up from 775 at the end of the March quarter. As of June 30th, the FDIC oversaw a total of 7,828 banks, which was a drop of 104 banks from the 7,932 it oversaw as of the end of the previous quarter. For the first time in the 38 years that the data has been collected, the FDIC did not add any new banks in the quarter..
For the first time since 2006 the number of loans at least three months past due fell, and the number of loans charged off by banks declined across most major loan categories. Banks set aside a total of $40.3 billion to cover future loan losses, and this is the lowest figure reported by the banks in the last two years.
(8/29/10)- Banking regulators did not close any banks on Friday afternoon, so the total bank closure number still stands at 118 so far this year. This is not an indication that the majority of bank closures for the year is behind us because this is not the reality of the situation.
There are a total of 7,932 bank and savings associations covered by the FDIC, of which 775 were on the problem bank list as of the end of March.
(8/16/10)- For the second time in two weeks an Illinois bank was the sole weekly casualty among FDIC insured bank failures in this country, bringing the total number so far this year up to 110. There have been 14 bank failures in Illinois so far this year.
The FDIC took over the Palos Bank & Trust Company, based in Palos Heights, Ill, with $493.4 million in assets, and $467.8 million in deposits. First Midwest Bank, based in Itasca, Ill., agreed to assume the assets and deposits of the Palos Bank.
The failure of Palos Bank is expected to cost the Deposit Insurance Fund (DIF) $72 million.
(7/20/10)- The FDIC's board voted 5-0 to approve an agreement between the agency and regulators at the Federal Reserve Board and the Treasury Department's Office of the Comptroller of the Currency, and it's Office of Thrift Supervision that expanded the FDIC's power to investigate banks. This agreement updated the prior agreement between these same parties that was signed in 2002.
The FDIC claimed that it lacked the power under the older agreement to gain access to banking data that was needed to properly evaluate the banks' risk
The Fed and the two Treasury Department agencies have the primary authority to regulate banks. The FDIC steps in after a bank failed under the old agreement.
Under the 2002 agreement the FDIC conducted special exams of banks at the same time as the periodic reviews by their primary regulators. The FDIC was blocked from examining banks that were deemed financially sound by their primary regulators.
(6/21/10)- Federal regulators seized the Nevada Security Bank, based in Reno, Nev., making it the 83rd bank taken over so far this year. By this time last year the federal government had seized 40 banks. There were 140 bank failures in 2009 that cost the government about $30 billion. This failure will cost the Deposit Insurance Fund (DIF) about $80.9 million.
There are a total of 7,932 bank and savings associations covered by the FDIC, of which 775 are on the problem bank list as of the end of March.
Umpqua Bank, based in Roseburg, Ore., agreed to assume the $490.3 million in assets and $479.8 million in deposits of the failed bank. Nevada Security has 5 bank branches, all of which will stay open under the Umpqua name.
The FDIC and Umpqua agreed to share losses on $368.2 of Nevada Security Bank's loans and other assets.
The FDIC estimated that the cost of resolving this current banking crisis would cost about $100 billion over the next 4 years. Banks have already prepaid their premiums required by the FDIC for the years 2010 through 2012 to replenish the fund, but this clearly will not be enough to cover the shortages that will be coming with the additional bank failures
(6/4/10)- The state that has seen the most bank failures so far this year is Georgia, which has had 38 bank failures as of May 28. This represented 12.8% of all the banks in the state. Illinois has had 33 failures, which represents only 5.4% of all banks in that state. Here's a list of the top seven other states as far as number of bank failures go, with the percentage of banks in the state in parenthesis according to figures released by the FDIC:
Florida-29 (10.6%); Calif.-27 (9.5%); Minn.- 13 (3.2%); Missouri- 9 (2.6%); Washington State-9 (1-.5%); Mich.- 8 (5.8% and Texas- 8 (1.3%)
(5/30/10)- Five banks were closed on Friday by federal regulators bringing the total number of bank failures this year to 78. By this time last year, the regulators had closed 36 banks. Twenty-five banks failed in 2008 and only 3 went under in 2007.
The three Florida banks that were taken over were owned by a holding company, Bank of Florida Corp. The FDIC also seized the Las Vegas-based Sun West Bank, and the Granite Community Bank, located in Granite Bay, Calif.
The failures of the 3 Florida banks are expected to cost the FDIC a total of $203 million, while the other two bank failures will cost a total of $114 million. There have been a total of 13 Florida banks that have been closed by the FDIC so far this year. Six California banks have been closed so far this year.
The 140bank failures in 2009 cost the FDIC insurance fund more than $30 billion. The fund's deficit, as of the end of March this year, was $20.7 billion. The agency estimates that the cost of the bank failures over the next 4 years will come to over $100 billion. Last year, the FDIC mandated that the banks in the system prepay an estimated $45 billion in premiums covering the period 2010 through 2012.
(5/22/10)- The Federal Deposit Insurance Corporation had a total of 775 banks on its "problem" list at the end of the first quarter this year, which is up from the 702 that were on the list at the end of 2009. This represents slightly less than 10% of the banks covered by the agency.
The total number of loans from the banks that were at least 3 months in arrears climbed for the 16th consecutive quarter. At the end of 2008, there were 252 banks on the "problem" list.
"The banking system still has many problems to work through, and we cannot ignore the possibility of more financial-market volatility," said FDIC Chairman Sheila Bair. Had it not been for certain accounting changes, bank lending would have declined for the seventh straight quarter.
Ms. Bair went on to say that she does not expect that the agency will have to assess new fees on the banks covered by the FDIC.
(5/8/10)- Florida, Minnesota, Arizona and California were the states where federal regulators closed more banks on Friday, bringing the total bank closures this year to 68. So far this year the closure rate is running about double the 140 bank closures of last year.
The banks closed Friday were: The Bank of Bonifay, based in Bonifay, Fl; the Access Bank, based in Champlin, Minn.; Towne Bank of Arizona, based in Towne, Ariz.; 1st Pacific Bank of California in San Diego; and First Federal Bank of Florida in Lake City, Fl
(4/25/10)- The state of Illinois took it on the chin Friday as federal regulators closed 7 banks, all of which were located in that state. That brings the total bank closure count so far this year to 57.
The Federal Deposit Insurance Corporation (FDIC) took over 4 of the banks located in Chicago, while the other 3 banks were spread out throughout the state. The MB Financia Bank agreed to acquire the deposits of both Broadway Bank of Chicago, and the New Century Bank, which was also headquartered in Chicago.
Republic Bank of Chicago agreed to assumed the deposits of the Citizens Bank & Trust Company of Chicago, while Harris National Association of Chicago agreed to acquire Amcore Bank, N.A. of Rockford, Ill.
Northbrook Bank & Trust Company of Northbrook agreed to acquire the deposits of Lincoln Park Savings Bank, First Midwest Bank of Ithaca agreed to acquire the deposits of Peotone Bank & Trust Company and Wheaton Bank & Trust will acquire the deposits of Wheatland Bank.
The total cost to the FDIC will be about $1 billion.
(3/28/10)- Bringing the number up to 41 banks shut so far this year, federal regulators shut down 4 more banks on Friday. Two of the shut banks were located in Georgia and one each in Florida and Arizona.
The Arizona bank that was shut down was the Desert Hills Bank, based in Phoenix. New York Community Bank, based in Westbury, N.Y., is assuming the assets and deposits of the Desert Hill Bank.
The FDIC announced that it would be guaranteeing only 80% of potential loan losses, down from as much as 95% on soured loans covered by the agreements reached with buyers of collapsed banks.
(3/15/10- A New York City bank became the 27th bank failure in the nation, when state regulators shut down LibertyPointe Bank, which had one branch in Manhattan and two in Brooklyn. The failure was the first one in the city in more than a decade.
In mid-July, federal regulators had ordered the bank to stop lending to developers and to raise cash.
State regulators, after closing the bank turned it over to the Federal Deposit Insurance Corp. The FDIC in turn reached a deal with Valley National Bank which will assume LibertyPointe's deposits of about $210 million. LibertyPointe had over $2 billion in loans on its book.
The FDIC estimated that the rescue would cost its insurance fund $24.8 million.
Valley National has over 200 branches, and the 3 LibertyPointe branches will open on Monday with the name of Valley National on its doors.
The last bank failure in New York State occurred five years ago when state regulators closed the Waterford Village Bank, based in Williamsville near Buffalo, in July.
The last failure of a New York City-based bank occurred in December 1999, when regulators closed Golden City Commercial Bank, a small bank that had an office in Flushing, Queens, and one on Lower Broadway in Manhattan.
(3/7/10)- Twenty-six and counting. With the closure on Friday of 4 more banks, the total for 2010 now stands at 26, and unfortunately we are well on our way towards surpassing last year's total of 140 bank closures in this country.
The banks that were closed this past week were located in Florida, Illinois, Maryland and Utah.
The FDIC is continuing with its program of auctioning off some of the assets of the banks that have been seized this year as some semblance of normality is returning to the mortgage market.
(3/2/10)- As of the end of 2009 the Federal Deposit Insurance Corporation (FDIC) carried a negative balance of $20.9 billion. According to the latest FDIC report banks wrote down $53 billion in loans in the final three months of last year. That quarterly write-off rate was the largest ever recorded in the 26 years that the FDIC has collected the data.
Bad credit card, mortgage and corporate loans escalated in the last quarter last year for the 12th consecutive quarterly increase, even though it did show that the rate of write-off was slowing down.
In September, the FDIC ordered banks to prepay quarterly assessments that would have been due through 2012. That provided an additional $46 billion to restore the fund to normal. The FDIC will add that money to the fund in small amounts over the next 13 quarters, so that the negative balance is not really as bad as it looks.
The agency also announced it would issue bonds backed by the assets of failed banks and give guarantees to the buyers of these bonds.
(2/21/10)- And the numbers keep growing!!!!!! Federal regulators seized four more banks on Friday, bringing the total to 20 banks taken over by the FDIC so far this year. The banks were located in Illinois, Texas, Florida and California.
It is now estimated that there will be about 175 bank failures this year compared to the 140 that failed last year.
(2/4/10)- Federal regulators shut down five more banks on Friday, bringing the total to 14 banks that have been shut by the fed so far this year. The failure of First Regional Bank in Los Angeles, with nearly $2.2 billion in assets, and $1.9 billion in deposits, is expected to cost the FDIC fund $825.5 million.
Financial experts expect to see more than the 140 bank closures that took place in 2009 to happen this year.
(1/19/10)- The number of banks that were closed last year was the highest number closed in a year since 1992, at the height of the savings and loans banking disaster.
(1/15/10)- By a 3 to 2 vote, the Federal Deposit Insurance Corporation's Board of Directors approved at its meeting on January 12th the initiation of the procedurel that would tie the fees banks pay the agency for deposit insurance to the risk profile of the compensation packages for executives of the bank.
Banks with compensation packages that the FDIC views as less risky, such as those that allow claw back pay from executives could be given a break on fees that they pay to the agency. Banks that have pay packages that the agency views as giving officials an incentive to put the bank at more risk would pay a higher fee to the agency.
Banks presently pay a higher fee if they are in weaker financial shape, accept large amounts of high-risk deposits, or rely too heavily on funding from the Federal Home Loan Banks.
(12/25/09)- The Federal Deposit Insurance Corporation was created in 1933 during the Great Depression. It is presently one of four agencies that oversee the banking system. The agency has continued to function today with just about the same powers it has had for all these years.
With the large outcry to change the way the financial industry is regulated, the pressure is growing to change the power that the FDIC has over the financial industry.
Connecticut Senator Christopher Dodd, the Democratic chairman of the Senate Banking Committee is proposing the revocation of the agency's ability to monitor the operations of banks. The FDIC would not have any jurisdiction under his proposals until after a bank fails.
There are about 5,000 banks overseen by the agency, which can create a conflict with the Federal Reserve which also monitors much of the operational side of the banking industry. It will add more than 1,600 new staffers next year, and is pushing its budget up 35% as the number of failing banks continues to grow.
Its inventory of assets in liquidation has more than doubled from the beginning of the year to $36.8 billion through the end of November. Its 2010 operating budget will increase to $4 billion of which about $2.5 billion will go towards its bank failure operations.
The additional staffers will bring the total to about 8,600 in 2010, with almost all of the new hires being taken on as temporary staff.
(12/12/09)- Federal regulators closed three banks on Friday. This brings the total bank closures so far this year to 133. Please keep in mind that there are over 550 banks on the FDIC's "problem bank" list, so that there will be many more bank closures before the current crisis in the banking system comes to a conclusion.
Also keep in mind that the FDIC's insurance fund, at last count, had a negative credit balance of $8.2 billion at the end of the last quarter.
The 133 bank failures are the most in a year since 1992. They have cost the federal deposit insurance fund more than $28 billion so far this year.
(12/7/09)- Regulators closed 6 more banks on Friday bringing the total bank closures to 130 so far this year. The AmTrust Bank in Ohio was among the banks closed, and it is the fourth-largest bank to fail so far this year.
The FDIC took over AmTrust, which is based in Cleveland Ohio, with about $12 billion in assets and $8 billion in deposits. Its failure is expected to cost the federal deposit insurance fund about $2 billion.
(11/30/09)- The Federal Deposit Insurance Corporation reported that banks posted a $2.8 billion gain in the third quarter of the year ended September 30th, 2009, after a $4.3 billion loss in the previous quarter.
The number of "problem banks" increased however to 552, from 416 in the second quarter. Every category of bad loans, from credit cards, to mortgages, to small business and commercial real estate continued to increase, with the rate of increase decreasing from the prior quarter.
"The credit adversity we have been discussing for some time remains with us, and we expect it will be a couple of more quarters before we see a meaningful improvement in that trend," said Sheila C. Bair, the FDIC chairwoman. "I am optimistic that if we address these problems head on, we will see clear signs of improvement in bank earning and lending in 2010.
The fund had a negative balance of $8.2 billion at the end of the quarter, which was the first negative balance for it since 1992 when the agency had to clean up the savings and loan debacle.
The agency recently approved plans calling for the industry to lend money to the insurance fund by ordering banks to prepay annual assessments that would otherwise have been due through 2012.
This move is expected to add $45 billion to the fund, which stood at $34.6 billion a year ago.
Over all, banks charged off $50.8 billion in the third quar4ter, or 2.71 percent of assets. Bank lending dropped by the largest percentage since the government began keeping this statistic in `981.
The bulk of the fund's negative $8.2 billion stem from money that regulators set aside to cover future failures, allowing it to operate in the red.
FDIC officials expect that bank failures will cost the insurance fund $100 billion over the next five years. More than half of that cost has already been accounted for, while the new prepayment plan is expected to cover the rest.
In the worst case scenario, the FDIC can borrow from its backup credit with the U.S. Treasury.
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