FDIC Bank Fallure Report, Holiday Edition

This week the Federal Deposit Insurance Corporation closed seven banks: Millennium State Bank of Texas (Dallas, TX); Founders Bank (Worth, IL); First National Bank of Danville (Danville, IL); Elizabeth State Bank (Elizabeth, IL); Rock River Bank (Oregon, IL); First State Bank of Winchester (Winchester, IL); and John Warner Bank (Clinton, IL). Total assets of the seven closed banks were $1,485,000,000. The cost to the FDIC is estimated at $314,300,000. The percentage of FDIC loss out of total assets for the seven is 21.16%.

These closures bring the total assets of FDIC-failed banks (since December of 2007) to $411,188,680,000, with cost-to-FDIC brought to $26,532,400,000 - this includes the assets of Washington Mutual, whose closing offered no cost to the FDIC. The percentage of FDIC losses to total assets presently stands at 6.45%, up from 6.40% as of last report.

Upon elimination of WaMu's assets from the analysis, total assets are $104,188,680,000, and total cost is $26,532,400,000. The percentage of FDIC losses to total assets now stands at 25.47%, down from 25.53% as of last report.

According to the FDIC, "The six failed Illinois banks are all controlled by one family and followed a similar business model that created concentrated exposure in each institution. The failure of these banks resulted primarily from losses related to the banks' investment in collateralized debt obligations and other loan losses." This post-mortem commentary from the FDIC on the nature of the banks' investments is unusual. We suspect it may be a veiled warning to State and Federal banking regulators to watch for similar situations.

On the basis of the ratio of bank closures to population, and the ten most afflicted states are:

1. Nevada
2. Georgia
3. Utah
4. Kansas
5. Illinois
6. Minnesota
7. Oregon
8. Missouri
9. Colorado
10. Washington

On the basis of the total losses-to-assets ratio in each state, the worst are as follows:

1. Utah - 40.32%
2. New Jersey - 40.13%
3. Idaho - 39.11%
4. Michigan - 39.03%
5. Florida - 38.11%
6. West Virginia - 36.52%
7. Maryland - 35.00%
8. Minnesota - 33.01%
9. Georgia - 32.42%
10. Washington - 32.39%