5 more banks shut down by the FDIC costing over $300 million

May 30, 2010 by · Leave a Comment
Filed under: Bank Failure 

Five more bite the dust over the weekend.   Our total for 2010 to a whopping 78 banks put into receivership by the Federal Deposit Insurance Corporation or FDIC.  The banks ranged from Florida, Nevada and California.  They collectively cost the insurance fund $317 million dollars.  As reported by AP, the fund will be depleted $100 billion dollars by 2016.   With there no incentive to over-report these numbers, we can be safe to say that it will be much more than that once all the final numbers come in.

Banks are now pre-paying two years of deposit insurance premiums.  That is not a good sign, it shows that many more failures are expected before this expanding crisis is over.  The problem list has also expanded to 775 banks, these are banks that the FDIC are monitoring closely to see if their liabilities outstrip the assets on there respective balance-sheets.

AP – The failures of the three Florida banks are expected to cost the deposit insurance fund a total of about $203 million. The failures of Sun West Bank are expected to cost around $96.7 million, while losses at Granite Community Bank are expected to cost $17.3 million.

The three Florida closures brought to 13 the number of bank failures this year in Florida, a state with one of the highest concentrations of bank collapses and where the meltdown in the real estate market brought an avalanche of soured mortgage loans. Fourteen banks in the state failed last year.

California is another state with a heavy concentration of bank failures, and Granite Community Bank was the sixth bank to fall in the state this year, following the shutdown of several big California banks in the last months of 2009. Seventeen banks failed in California last year.

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