FDIC Bank Failure Report

On 18/12/09, the Federal Deposit Insurance Corporation closed seven banks: Rockbridge Commercial Bank of Atlanta, Georgia; Peoples First Community Bank of Panama City Florida; Citizens State Bank of New Baltimore, Michigan; New South FSB of Irondale, Alabama; Independent Bankers' Bank of Springfield, Illinois; Imperial Capital Bank of La Jolla, California; and First Federal Bank of California in Santa Monica, California. The total assets of the closed bank were $14,448,100,000, and total deposits were $11,157,130,000. The cost to the FDIC is estimated at $1,827,420,000.

According to our methodology, the recoverable value of the banks was only 64.57% of the declared asset value. This makes the recoverability of this week's closures distinctly above the cumulative recoverability since December of 2007, which stands at 57.66% (up slightly from last report's 57.48%).

Cumulative cost-to-FDIC so far in the Depression was brought to $56,384,590,000. These closures bring the total declared assets of FDIC-failed banks (since December of 2007) to $544,460,780,000, and total FDIC-insured deposits to $370,346,650,000. The recoverable value of all failed banks was only $313,962,060,000 (57.66% of the declared value).

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This week's closures were definitely not typical, as there were a number of straight out liquidations; three, to be exact. One of those liquidations (Rockbridge) will be complete by Monday! We pity the customers whose outstanding checks will be bouncing next week. We suspect a bit of year-end housekeeping on the part of the FDIC, as they will be kicking back between the 24th and 28th of December. Further closures this year are doubtful due to the upcoming holiday; perhaps Santa Claus has made the banking system all better.

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On the basis of the ratio of bank closures to population (i.e. simply the number of failures in each State, with no account of assets or deposits), the ten most afflicted States are listed here. Only those States which have two or more closures are considered.

1. Georgia
2. Nevada
3. Illinois
4. Kansas
5. Minnesota
6. Utah
7. Florida (up from #8)
8. Missouri
9. Oregon
10. Arizona

The recoverable value represents how much of declared assets are worth by our estimate on the open market. The following are the ten States with the lowest recoverable value; only those States which have had two or more closures are considered in this analysis.

1. Florida (38.89%, up from 36.65%)
2. Colorado, up from #4 (42.80%)
3. Michigan (43.53% up from 42.78%)
4. California, down from #2 (45.06% up from 42.28%)
5. Nevada (49.81%)
6. Ohio (50.84%)
7. Georgia (54.64% up from 54.62%)
8. Utah (55.45%)
9. Washington (56.18%)
10. North Carolina (56.70%)

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The Frugal Scotsman's FDIC Cash Burn Through O'Meter gets adjusted with a subtraction of $1,827,420,000. The value now stands at $39,559,990,000.