Tuesday, February 24, 2009

Late Update: 14th Bank Failure in 2009

Silver Falls Bank was closed last Friday, the only one the FDIC got around to shuttering. The bank was on the Bad Bank list and the loss percentage was sizable.

The Bad Bank list basically measures loans that are either significantly delinquent or in such bad shape that the bank isn't even counting the interest any more (non-accrual), relative to Tier 1 capital and loan loss reserves.

Remember, banks are roughly levered $10 to $1. A 10% loss on assets wipes these institutions out.

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