|1st American State Bank of Minnesota||Hancock||MN||15448||February 5, 2010||February 5, 2010|
|American Marine Bank||Bainbridge Island||WA||16730||January 29, 2010||February 3, 2010|
|First Regional Bank||Los Angeles||CA||23011||January 29, 2010||February 3, 2010|
|Community Bank and Trust||Cornelia||GA||5702||January 29, 2010||February 3, 2010|
|Marshall Bank, N.A.||Hallock||MN||16133||January 29, 2010||February 3, 2010|
|Florida Community Bank||Immokalee||FL||5672||January 29, 2010||February 3, 2010|
|First National Bank of Georgia||Carrollton||GA||16480||January 29, 2010||February 3, 2010|
|Columbia River Bank||The Dalles||OR||22469||January 22, 2010||February 2, 2010|
|Evergreen Bank||Seattle||WA||20501||January 22, 2010||February 2, 2010|
|Charter Bank||Santa Fe||NM||32498||January 22, 2010||February 2, 2010|
|Bank of Leeton||Leeton||MO||8265||January 22, 2010||February 2, 2010|
|Premier American Bank||Miami||FL||57147||January 22, 2010||February 2, 2010|
|Barnes Banking Company||Kaysville||UT||1252||January 15, 2010||February 3, 2010|
|St. Stephen State Bank||St. Stephen||MN||17522||January 15, 2010||January 26, 2010|
|Town Community Bank & Trust||Antioch||IL||34705||January 15, 2010||January 26, 2010|
|Horizon Bank||Bellingham||WA||22977||January 8, 2010||January 12, 2010|
FDIC’s problem bank list grows to 552, DIF now negative
FDIC published its quarterly banking profile today. Here are the latest banking industrystatistics at a glance. A few interesting takeaways I’d like to highlight. First, the problem bank list grew again. And it still understates total problem assets…both Citi and Bank of America should also be on this list.
The number of institutions on the FDIC’s “Problem List” rose to its highest level in 16 years. At the end of September, there were 552 insured institutions on the “Problem List,” up from 416 on June 30. This is the largest number of “problem” institutions since December 31, 1993, when there were 575 institutions on the list. Total assets of “problem” institutions increased during the quarter from $299.8 billion to $345.9 billion, the highest level since the end of 1993, when they totaled $346.2 billion. Fifty institutions failed during the third quarter, bringing the total number of failures in the first nine months of 2009 to 95.
Also, what will get lots of headlines today is that the Deposit Insurance Fund went negative as of September 30th. We already knew this to be true, and it’s not totally fair to report the negative balance without noting that FDIC does have cash. That said, the DIF is still in a very precarious position.
As projected in September, the FDIC’s Deposit Insurance Fund (DIF) balance – or the net worth of the fund – fell below zero for the first time since the third quarter of 1992. The fund balance of negative $8.2 billion as of September already reflects a $38.9 billion contingent loss reserve that has been set aside to cover estimated losses over the next year. Just as banks reserve for loan losses, the FDIC has to set aside reserves for anticipated closings over the next year. Combining the fund balance with this contingent loss reserve shows total DIF reserves with a positive balance of $30.7 billion.
Chairman Bair distinguished the DIF’s reserves from the FDIC’s cash resources, which stood at $23.3 billion of cash and marketable securities.To further bolster the DIF’s cash position, the FDIC Board approved a measure on November 12th to require insured institutions to prepay three years worth of deposit insurance premiums – about $45 billion – at the end of 2009. “This measure will provide the FDIC with the funds needed to carry on with the task of resolving failed institutions in 2010, but without accelerating the impact of assessments on the industry’s earnings and capital,” Chairman Bair said.
The DIF will continue to be negative after FDIC gets the additional $45 billion at the end of 2009. That’s not a “special assessment,” it’s the next three years’ regular assessments being collected up front. The distinction is crucial. Because it’s a regular assessment, FDIC won’t count it as new reserves for the DIF. Instead it will be counted as deferred revenue on the DIF’s balance sheet.
Why is that important? Because unlike the $5.6 billion special assessment in Q2, banks don’t have to take a hit against their capital all at once for this assessment. They get to treat it as a prepaid expense.
Although they tell us the FDIC fully insures bank accounts. The standard insurance amount currently is $250,000 per depositor.
All well & good, but at this rate & at some point the FDIC insurance $ well will run dry.
Maybe the mattress industry would do well to invent a fireproof safe/vault built into mattresses to avoid losing it all in failed banks that eventually result in a failed FDIC?
Potential names for this new mattress style:
The "Bank on It"