Before getting to specifics, some year-to-date totals.
- # of banks closed: 32
- Total Assets of banks closed: $19.2 billion
- Total Deposits of banks closed: $15.4 billion
- Total Estimated Cost to the Deposit Insurance Fund of bank closures: $5.3 billion
At 12/31/08, the DIF had just $19 billion backing $6.4 trillion worth of insured assets.
To the day’s failures…
The first bank failure announced this evening—#30 on the year—was the largest so far this year. Silverton Bank of Atlanta had $4.1 billion of assets and $3.3 billion worth of deposits, all within the FDIC’s insurance limits. FDIC anticipates the failure will cost the Deposit Insurance Fund $1.3 billion.
As noted last week, FDIC’s preferred method of resolving failed banks is to sell their assets to another, healthy bank. This minimizes costs to the DIF as well as disruption for customers.
In this case, FDIC apparently wasn’t able to find a buyer and will instead operate a “bridge bank” for Silverton’s customers.
The second bank failure —#31—was small. North Jersey Community Bank had just $45 million in assets and $44 million in deposits. Cost to the DIF is estimated at $18 million.
The third bank failure—#32—was Cache Valley Bank of Utah, with assets of $299 million and deposits of $284 million. Cost to the DIF is estimated at $119 million.