Posts Tagged ‘Watch List’

Quick Hit: “A Decent Month for FDIC!”

May was a good month for the FDIC and the Deposit Insurance Fund.

The 14 banks shut down by the bank overseer will only cost $830 million dollars.

This is a great victory after the disastrous April, when the Fund was drained of $9.5 billion. The largest foreclosure in May cost the Deposit Insurance Fund only $216 million.

Florida lost 3 more banks on Friday increasing their total failures to 29 since the beginning of 2008. Combined, the trio cost the DIF $203 million.

Troublesome and somewhat overshadowing the good news in May is the increase in the number of troubled institutions. Another 73 banks were added to the Watch List in the first quarter of 2010. There are now 775 banks under the watchful eye of the FDIC.

The quarterly number slowed considerably, but still increased. Combined with the positive numbers in May there is hope that the improvement is sustainable.

Sustainability is what is needed in this tenuous financial world.

We’ll keep a sharp eye on June and hope for the best!

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“416 Make the List!”

Why write a follow-up to the Bank Failure Series when, on Friday, the FDIC seized only three (3) more banks?

The three (3) seized banks were nothing spectacular, average takeovers in a series of larger, more dramatic bank foreclosures. The three banks closed this week brought the total through August to 84 compared to just 10 seized by this time in 2008.

But the most significant announcement from the FDIC came on Thursday. The FDIC announced that the bank watch list increased this quarter to 416 banks that they are monitoring for possible collapse and foreclosure. That is an increase of 111 from the 305 on the list last quarter, and the highest figure since the second quarter of 1994, near the end of the Savings and Loan Crisis.

It’s difficult to assess the impact of a 35% increase in the list but, by any measure, it should be cause for deep concern. I have predicted that 2009 could see the failure of 200 banks, but some are now predicting the loss of over 1,000 banks before this crisis is over.

Watch next week for an update on the state of the banks and the impact that it will have on our fragile economy.

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