Friday, January 7, 2011

Bank Failure Friday: FDIC Closes 2 Banks to Begin 2011 (Charts) *Seizures in Florida & Arizona are first casualties*

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2010 bank failures were 157, 2009 bank failures were 140


Bank Failure Friday: FDIC Closes 2 Banks to Begin 2011

The 2011 USA bank failures begin with 2, one in Florida and one in Arizona, with the closure of the 2 banks listed below. Annual charts of USA bank seizures and the FDIC problem bank list are below.

Total assets of the closed banks were $749,100,000 ($749.1 million), based on the September 30, 2010 call reports (regulatory financial statements). Both banks were merged via purchase and assumption agreements into other banks. Overall, First Commercial Bank was a mid-size community bank and Legacy Bank was a small community bank.

#1 First Commercial Bank of Florida, Orlando, FL
First Southern Bank, Boca Raton, Florida, to assume all of the deposits
As of September 30, 2010, First Commercial Bank of Florida had approximately $598.5 million in total assets
First Southern Bank agreed to purchase essentially all of the assets.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $78.0 million.

#2 Legacy Bank, Scottsdale, AZ
Enterprise Bank & Trust, St. Louis, Missouri, to assume all of the deposits of Legacy Bank.
As of September 30, 2010, Legacy Bank had approximately $150.6 million in total assets
Enterprise Bank & Trust agreed to purchase essentially all of the assets.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $27.9 million.

The next FDIC bank closings, if any, will most likely be announced on Friday, January 14. There will probably be several seizures in January after the halt for the Christmas and New Year's holidays.


USA Failed Banks by Year

Bank failures and therefore FDIC seizure of banks, dramatically increased in 2009 and 2010 - a 2-year total of 297 compared to 0 in both 2005 and 2006. As noted below regarding total problem banks, bank failures in 2011 are expected to continue at a high rate and be 100+. The chart below is the actual data from 2005 through 2010. Bank failures for 2011 are estimated by extrapolating 2011 actual closures based on a 52-week year. Actual 2011 bank failures will be included on the chart later this year as the closures accumulate to a higher level.
Year, Total Bank Failures
2005: 0
2006: 0
2007: 3
2008: 25
2009: 140
2010: 157
2011: 2 actual, 104 estimated




USA Problem Banks by Year

The FDIC problem bank list continues to rise, actually skyrocket, although the total assets of these banks has leveled off. From the year-ends 2005 through 2009, the total problem banks were 52, 50, 76, 252, and 702, respectively. Now at 9/30/2010 the total is an astronomical 860. The total assets of the problem banks from the year-ends 2005 through 2009 were $7B, $8B, $22B, $159B, and $403B, respectively. The total assets of the current (9/30/2010) 860 problem banks is $379B, indicating most of these are small to medium community banks. Chart data, from YE 2005 through the QE September 30, 2010, is:
Date, Total Problem Banks
12/31/2005: 52
12/31/2006: 50
12/31/2007: 76
12/31/2008: 252
12/31/2009: 702
9/30/2010: 860




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