As with virtually every other failure during this run, the FDIC insured all deposits, not just those within the $250,000 limit, effectively stealing from its citizens to give money away in violation of its mandate (as we discussed last week).
In that same post last week, we also noted that Florida was a dark horse contender to make a run at the Red Jersey of Shame, which will be granted by TILB the state that leads the nation in bank failures. Going into this week, Florida had a paltry four failures trailing: Georgia with 16, Illinois 13, California 8. Last week we said,
In our opinion, Florida with four seems woefully underrepresented. We suspect their most shameful days are ahead of them.Florida responded quite helpfully with two this week and Oregon tacked on its third of the year. Both Florida banks were in the Sarasota area and were acquired by Stearns Bank in Minnesota. These are the second and third banks Stearns acquired this year (the last being the June 26th failure of Horizon Bank in Minnesota).
Here's this week's summary of losses. A slight improvement from last week, though still generally in the ballpark:
First State Bank, Sarasota, FLImportantly, the pace of failure has stayed brisk. As we predicted, banks are going to begin failing at such a rapid clip that people will almost become numb to the problem. In mid-July, we wrote that we expect at least 250 failures in the next 15 months, equating to 3-4 failures per week. Since then we have averaged five a week.
Assets: $463mm, FDIC Losses: $116mm, Losses as a Percentage of Assets: 25.1%
Community National Bank of Sarasota County, FL
Assets: $97mm, FDIC Losses: $24mm, Losses as a Percentage of Assets: 24.7%
Community First Bank, Prineville, OR
Assets: $209mm, FDIC Losses: $45mm, Losses as a Percentage of Assets: 21.5%
Straight Average Losses as a Percentage of Assets: 23.8%
Weighted Average Losses as a Percentage of Assets: 24.1%
Go home and get your boots, the party is just getting started.
