Five more banks were shuttered today, one really tiny, one fairly large and three in the middle. The biggest one was Colonial Bank, located (formerly, I guess) in Alabama. Colonial could not sustain the losses they suffered from an ill conceived foray into Florida real estate.
As a result, we are much closer to insuring our own deposits. I know that I have been harping on this for quite some time, but the de facto insolvency of the FDIC (along with the PBGC, NCUA and the continuing conservatorship of Fannie and Freddie) is transferring the financial burden of failure from the risk takers to the tax payers. This is not capitalism.
In review:
- 77 bank failures in 2009
- Cost of 2009 failures: $18.3 billion
Since the most recent FDIC quarterly report:
- Insurance Fund balance on 3/31/09: $13 billion
- Cost of failures since 3/31/09: $16 billion
- Special assessment income (one time): $5.7 billion
- Additional income (my estimate): $1.25 billion
- Current balance: $3.95 billion
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