The FDIC last left us with 99 failed banks for the year. Everyone patiently waited for failure #100. It came, went, and didn’t even stop for coffee. Seven new additions to the FDIC Failed Bank List:
Partners Bank, Naples, FL — Total deposits of approximately $64.9 million and an estimated hit to the DIF of $28.6 million.
American United Bank, Lawrenceville, GA — Total deposits of approximately $101 million and an estimated hit to the DIF of $44 million. This had another one of those annoying loss-share agreements, this time between the FDIC and Ameris Bank on approximately $92 million of American United Bank’s assets.
Hillcrest Bank Florida, Naples, FL — Total deposits of approximately $84 million and an estimated hit to the DIF of $45 million.
Flagship National Bank, Bradenton, FL — Total deposits of approximately $175 million and an estimated hit to the DIF of $59 million. From the press release: “The FDIC and First Federal Bank of Florida entered into a loss-share transaction on approximately $130 million of Flagship National Bank’s assets.”
Bank of Elmwood, Racine, WI — Total deposits of approximately $273.2 million and an estimated hit to the DIF of $101.1 million.
Community Bank, Otsego, MN — Total deposits of approximately $80 million and an estimated hit to the DIF of $20 million. From the press release: “The FDIC and Central Bank entered into a loss-share transaction on approximately $75 million of Riverview Community Bank’s assets.”
First DuPage Bank, Westmont, IL — Total deposits of approximately $254 million and an estimated hit to the DIF of $59 million. From the press release: “The FDIC and First Midwest Bank entered into a loss-share transaction on approximately $247 million of First Dupage Bank’s assets.”
That brings us up to 106 for the year. Anything above a 30% hit to the DIF can be viewed as a failure for the regulators. This is mostly for terrible accounting rules, which isn’t the fault of the FDIC. Remember that the loss-share agreements run a high risk of incurring additional losses (beyond the estimates). They do have the nice property of helping the FDIC preserve some cash, something that was more important when the FDIC actually had cash. It’s now a foregone conclusion that the FDIC will have to borrow money from the Treasury.
