We said "virtually" every single bank failure. For the second time in the past two and a half months, the FDIC deposit insurance roulette wheel hit green zero when no buyer was found for the failure of Platinum Community Bank, Rolling Meadows, Illinois. This of course is what "should" happen every week. A service not purchased (insurance on the portion of a deposit that is over $250,000) is a service that should not be provided. Yet we at TILB are angry about this as well. We are angry because this inconsistency is nonsensical and immoral. We are frustrated because this leads to confusion and manipulated outcomes. We are incensed because certain taxpayers are favored at the expense of others for no predictable or reasonably explainable reason.
Lajuan Williams-Dickerson, come to the conversation prepared. You stand forewarned. If you aren't prepared, send The Sheila Bear our way.
This was an unusually bloody week as five banks failed and all five banks generated losses to assets of over 30%. Interestingly, after a week of brutal press on the dubious loss-sharing agreements the FDIC has been entering, they only entered one loss-sharing agreement this week. Prior to this week, 13 out of the last 15 failures had loss-sharing agreements.
It seems increasingly clear to us that the folks over at the FDIC are so overwhelmed by failure right now that they can't tell their ass from their head. This is what happens when you are forced onto the defensive. Understaffed, ill-prepared, under-capitalized, facing an ever-increasing tidal wave of failure and losses, and with uncertain leadership in the future (as GOP appointed Sheila Bair will likely leave after her term expires) it does not surprise us that the FDIC finds itself reacting to news stories with billions of taxpayer dollars rather than doing what they believe is right. Lajuan? Lajuan? Lajuan?
Our bank death scoreboard for the July 1st, 2009 through September 30, 2010 period stands at:
44 down: 206 (minimum) to go
On to this week's stats:
Red Jersey of Shame Leaderboard - Illinois picks up two points:
Georgia 18, Illinois 15, California 9, Florida 6.
Weekly Failure Summary:
First Bank of Kansas City, Kansas City, MO
Assets: $16mm, FDIC Losses: $6mm, Losses as a Percentage of Assets: 37.5%
InBank, Oak Forest, IL
Assets: $212mm, FDIC Losses: $66mm, Losses as a Percentage of Assets: 31.1%
Vantus Bank, Sioux City, IA
Assets: $458mm, FDIC Losses: $168mm, Losses as a Percentage of Assets: 36.7%
Platinum Community Bank, Rolling Meadows, IL
Assets: $345mm, FDIC Losses: $114mm, Losses as a Percentage of Assets: 33.1%
First State Bank, Flagstaff, AZ
Assets: $105mm, FDIC Losses: $47mm, Losses as a Percentage of Assets: 44.8%
Straight Average Losses as a Percentage of Assets: 36.6%
Weighted Average Losses as a Percentage of Assets: 35.3%
In total, the DIF suffered another $400 million of losses this week. Green shoots.