Just when I was about to call it a double feature, three more banks were added to the FDIC Failed Bank List:
Colonial Bank, Montgomery AL — This was announced this morning, so it was no surprise when it finally was shut down. This is currently the largest failure this year, with total assets of $25 billion and total deposits of approximately $20 billion. The estimated hit to the Deposit Insurance Fund is $2.8 billion. However, “The FDIC and BB&T entered into a loss-share transaction on approximately $15 billion of Colonial Bank’s assets.” This leaves a lot of uncertainty in the loss estimate.
Dwelling House Savings and Loan Association, Pittsburgh, PA — Deposits of approximately $13.8 million and an estimated hit to the FDIC fund of $6.8 million.
Union Bank, National Association, Gilbert, AZ — Deposits of approximately $112 million and an estimated hit to the FDIC fund of $61 million.
Community Bank of Arizona, Phoenix, AZ — Deposits of approximately $143.8 million and an estimated hit to the FDIC fund of $25.5 million.
Community Bank of Nevada, Las Vegas, NV — Deposits of about $1.38 billion and an estimated hit to the FDIC fund of $781.5 million. This is going to be expensive (proportionally), as no buyer was found. The FDIC created a Deposit Insurance National Bank to facilitate the resolution of the failed bank.
There are still two more large bank failures coming in the near future, but the FDIC is trying to line up a buyer for them. Today’s failure of Colonial should be viewed as a positive action. They warned about their imminent failure some time ago (and speculation preceded that). Things would have been worse if a buyer was not found (see #5 above). Of course, More Than 150 Publicly Traded US Banks Are In Serious Trouble. It is going to be a bumpy ride. 77 banks have failed this year.
