FDIC announced five more bank seizures this evening, two of which are in Georgia, the Chernobyl of Banking. None of the five will be a big drain on the Deposit Insurance Fund, but, as noted at the bottom, there’s another DIF-related issue that bears watching.
- Bank: Community Bank of West Georgia, Villa Rica, Georgia
- Buyer: None (FDIC will mail checks to insured depositors).
- Vitals: At 5/15/09, assets of $199.4 and deposits of $182.5 million.
- DIF Damage: $85 million
Note that this was a payout transaction. FDIC couldn’t find a buyer for the banks assets. As CR noted a couple months back, FDIC tries very hard to avoid payouts.
- Bank: Neighborhood Community Bank, Newnan, Georgia
- Buyer: CharterBank, West Point, Georgia.
- Vitals: At 3/31/09, assets of $221.6 million and deposits of $191.3 million
- DIF Damage: $66.7 million
- Bank: Horizon Bank, Pine City, Minnesota
- Buyer: Stearns Bank, National Association, St. Cloud, Minnesota
- Vitals: At 3/31/09, assets of $87.6 million and deposits $69.4 million
- DIF Damage: $33.5 million
- Bank: MetroPacific Bank, Irvine, California
- Buyer: Sunwest Bank, Tustin, California
- Vitals: At 6/8/09, assets of $80 million and deposits of $73 million
- DIF Damage: $29 million
- Bank: Mirae Bank, Los Angeles
- Buyer: Wilshire State Bank, Los Angeles
- Vitals: At 5/29/09, assets of $456 million, deposits of $362 million
- DIF Damage: $50 million
The Deposit Insurance Fund had dwindled to $13.0 billion as of March 31st. Since then, nearly $9.0 billion of new estimated losses have accrued. (The biggest chunk was $4.9 billion for BankUnited.)
Luckily, $13.0 billion isn’t the sum total of FDIC’s reserves. Before Sheila Bair has to hit up Treasury, she also has $28.5 billion of loan loss reserves. Also, there’s the (estimated) $5.6 billion special assessment that will be collected over the next week.
But there’s another potential issue here. Once upon a time, before the cascade of bank failures, the DIF was invested entirely in Treasurys. Now a portion is composed of received assets from busted banks.
Questions for FDIC: What portion of the DIF’s assets are illiquid? What are the marks on these assets? How much of the DIF may need to be written off if markets stay depressed?