06.04.2010
updated 06.07.2010
81 bank failures in 2010
original article written by Net Advisor™
Bank Name |
City |
State |
CERT # |
Closing Date |
2010 Failure # |
|---|---|---|---|---|---|
| TierOne Bank | Lincoln | NE | 29341 | June 4, 2010 | #81 |
| Arcola Homestead Savings Bank | Arcola | IL | 31813 | June 4, 2010 | #80 |
| First National Bank | Rosedale | MS | 15814 | June 4, 2010 | #79 |
The FDIC seized three more banks Friday night on June 4, 2010. Surprisingly, none of the banks were in Florida, Nevada, Georgia, or California.
In the case of Arcola Homestead Savings Bank, the FDIC apparently could not find another institution willing to take over the bank.
Arcola Homestead Savings Bank:
“On Friday, June 4, 2010, all accounts have been closed and you will receive a check up to your insured amount and a final statement from the FDIC. You will no longer have access to the website and online services.” (Source: FDIC)
As a result, Arcola Homestead is likely to file Chapter 11 bankruptcy protection. The FDIC currently insures qualifying deposits up to $250,000. Arcola Homestead was located in Illinois.
Deposits Are Not The Only Thing The FDIC Guarantees
The FDIC has frequently offered large financial support and loss guarantees to other banks willing to take on failing banks. In 2009, there were 140 “official bank failures;” of that 94 banks got FDIC loss-shares agreements, guaranteeing the acquiring banks would not lose up to $122 billion. (Source: FDIC)
This was a sweetheart deal as acquiring banks were basically being paid to take over the failing banks. The acquiring banks had a maximum risk of losing 5% of their newly acquired assets from the failed bank.
The FDIC, under agreement with the acquiring banks, would thus absorb (guarantee) 95% of the loan losses. The FDIC has said that it is now decreasing these guarantees, however it is still offering coverage of 80% of losses if another bank takes over a failed bank. (Source: Bloomberg)
See the other bank failures and history on our Bank Failure Tracker
(Chart Data Source: FDIC)
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