FDIC Bank Failure Report

On 19/02/10, the Federal Deposit Insurance Corporation closed four banks: La Jolla Bank, FSB, La Jolla, CA; George Washington Savings Bank, Orland Park, IL; The La Costa National Bank, La Costa, CA; and Marco Community Bank, Marco Island, FL. The assets of the closed banks were $4,186,300,000 and insured deposits were $3,363,400,000. The cost to the FDIC is estimated at $1,068,740,000. The closure data is available here, at the FDIC website.

According to our methodology, the recoverable value of the banks was only 54.81% of the declared asset value. This makes the recoverability of this week's closures well below the cumulative recoverability since December of 2007, which stands at 57.64% (down from 57.66%). This means that the failed banks' assets were worth approximately 54.81¢ on the dollar; overall, all closures since December of 2007 were worth approximately 57.64¢ on the dollar.

Cumulative cost to the FDIC to close all 185 banks (since December of 2007) was brought to $60,715,560,000. These closures bring the total declared assets of failed institutions to $559,578,080,000, and total FDIC-insured deposits to $383,237,850,000. The recoverable value of all failed banks was only $322,522,290,000 (57.66% of the declared value).

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Due to the increasing depth of data we have on hand, we have retired the bank closures to population analysis as a measure of stress. Instead, we will use analysis based on the cost of closures to the FDIC by State, in order to demonstrate which States are likely the most economically stressed in the United States. Only those States which have two or more bank closures are considered. Presently only six States are over our 'stressed' threshold.

1. Alabama
2. Georgia
3. Nevada
4. California
5. Florida
6. Illinois

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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 (39.95%, up from 39.81%)
2. Colorado (42.80%)
3. Michigan (43.53%)
4. California (45.47%, up from 45.13%)
5. Nevada (49.81%)
6. Ohio (50.84%)
7. Washington (55.25%)
8. Georgia (55.33%)
9. North Carolina (56.70%)
10. Maryland (56.90%)

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The Frugal Scotsman's FDIC Cash Burn Through O'Meter gets adjusted with a subtraction of $1,068,740,000. The value now stands at $35,230,780,000. This is our estimate of how much money the FDIC has remaining from its special assessment of approximately $45 billion (click here to read the FDIC press release about the assessment). Every week since December of 2009, we subtract that week's cost of bank closures to the FDIC from the standing total.