FDIC

As we pointed out earlier today, the FDIC announced that its list of troubled banks is the highest it has been since 1992.  Jerry Blanchard, a partner in Bryan Cave's Financial Institutions Client Service Group, observes that the “collateral damage from the collapse of the credit bubble and the residential real estate bubble continues to cause bank failures across the country." He also points out that, "The sunbelt, from California to Georgia, is overrepresented in the numbers but you also see significant bank failures in other states such as Illinois. We expect that

The Federal Deposit Insurance Corporation reports today that the number and total assets of institutions on its "Problem List" has continued to rise. At the end of December, there were 702 insured institutions on the list, up from 552 on September 30. In addition, the total assets of problem institutions increased during the quarter from $345.9 billion to $402.8 billion.

Earlier today, we noted that four banks had been closed by federal regulators on Friday. One of the banks was La Coste National Bank in La Coste, Texas. That bank had a sole branch, and is reopening today as a branch of the Community National Bank of Hondo, Texas. Community National assumed all of the deposits of La Coste and purchased essentially all of its assets; depositors of La Coste automatically have become depositors of Community National.

Federal regulators closed four banks on Friday night; the government has now shuttered 20 this year. 

The closed banks are:

The Office of the Comptroller of the Currency has approved the first use of a “shelf charter” for the acquisition of a failed bank, allowing Bond Street Bank, National Association, to acquire a Florida bank that was placed in receivership on Friday. 

We don’t think there’s any immediate concern that led to the agreement announced today between the Federal Deposit Insurance Corporation and the Bank of England – at least we hope not.

How much would you pay for about a half interest in nearly 1,200 distressed commercial real estate loans, with an unpaid principal balance of $1.02 billion? Here are other facts about the loans: 70 percent are delinquent, and 75 percent of the collateral is located in Georgia, California, Nevada and Florida. Would you pay $500 million? $400 million? How about

Budgets can tell a lot – and the 2010 budget approved today by the FDIC’s Board of Directors is no exception. The approved budget of $4 billion is an increase of more than $1.4 billion (55 percent) from 2009. Why the sharp rise? FDIC head Sheila Blair said

We found a report about fraudulent e-mails claiming to be from the FDIC of ironic interest. These emails are attempting to trick recipients into installing unknown software on personal computers. They falsely indicate that recipients should download and open a "personal FDIC insurance file" to check their deposit insurance coverage.

The Federal Deposit Insurance Corporation is often appointed as receiver for failed banks. In fact, it is being appointed as receiver more and more often that before. One has to wonder what the number of banks that have failed this year means about the state of the economy and the effectiveness of the Stimulus Package and government regulation over the financial system.