SNL Financial came out with a report today that said 90 banks have missed at least 1 TARP dividend payment, that is about 11% of all TARP recipients have defaulted for those of you keeping count. Keep in mind that about 829 institutions received TARP funds and about 50+ have repaid TARP funds, mostly the big name institutions that we all know and love. What is critical to note is that the defaults, I would call missing a payment a default since banks call a borrower who misses a payment to be in default, are increasing, not decreasing, as we approach the 2 year anniversary of the historic TARP legislation.

What that tells me is that not everything is fine when we are 2 years into the largest bailout in the history of bailouts and we have banks defaulting, remember only the “strongest banks” were getting bailed out, and bank closures accelerating as well. All of this while the pundits talk about “the greatest V shaped recovery in history” which is laughable. If we were in recovery mode wouldn’t these banks be earning their way out of this mess? They have the greatest accounting gimmick, mark to model, at their disposal and they are defaulting and being taken over by regulators at an increasing rate, how can that be? Perhaps the system is not as strong as we are told, that sounds about right to me.

We have to face the facts and the fact is that the data does not lie, banks are defaulting and failing. Real estate prices, both residential and, especially, commercial are falling which means more problems for banks. The banking industry as a whole is much larger than Citi, Bank of America and JP Morgan, and I am hard pressed to make the statement that those banks are largely benefiting from proprietary trading, government bond underwriting and the ability to mark to model. In other words, the bailout failed with the exception of the too big to fails and, as we already knew, the bailout was really just a selective bailout anyhow. How could Bear, Sterns be allowed to be acquired, but Lehman fail? Just days after Lehman fails AIG gets bailed out, the proof is pretty overwhelming about the selectivity of the bailouts, in my opinion, and TARP was designed to make the big banks flourish and the rest of the banks, well who cares because no one cares about the rest of the banks. I mean, who ever heard of Midwest Banc Holdings anyhow, except for the depositors.

So, as the ECB gets ready to release useless stress test results, which I am sure will show Greek and Spanish banks in trouble, but everything else hunky dory, consider the fact that our stress test and bailouts were completely and utterly useless. In other words, if you cannot trust our results, it has taken almost 2 years for the failures to show up, how can you trust the ECB’s results? Geithner knows this which is why he pushed for the stress test. He knew you can fool the markets for a little while with useless stress test and a seemingly huge bailout fund. However, the results cannot be hidden forever and our results are public, for those willing to look for the statistics, and prove that their strategy just kicks the can down the road and still leads to failure. Unless you consider accelerating defaults and closures a success, I am sure some talking head somewhere will see it as a stunning success, but in the real world most people see escalating failure for what it is, failure.

Another Friday and another busy night for the FDIC who had to close 3 institutions tonight bringing the total for 2010 to 30. On the bright side of things the FDIC troubled bank list is getting smaller. It was 702 and now it is now in the high 600’s unless they added more to the list. No worries though, everything is fantastic, oh did I mention Kansas City is closing half of its schools and Dade County Florida is under investigation for misleading investors on its finances, makes you wonder about the recent CA bond issue doesn’t it, or not.

Anyhow, tonight’s lucky winners are:

Apparently The Park Avenue Bank had a killer art collection complete with Andy Warhol pieces, I wonder how that will be handled, and its own curator.  Regardless, it was another somewhat large night for the FDIC with assets of the failed institutions totaling over $1B, I am not including Thursday’s closure. While the losses may not be huge they are persistent and it is like a death by a thousand cuts for an institution running a negative balance sheet. Again, no worry as everything is fine.

Now comes the fun part, how much did the FDIC actually lose tonight?

As you can see the losses and loss-share agreements are about $1B altogether so all these little banks add up. All the banks tonight were merged with another so nothing other than the name, and the fees depositors pay, will change tomorrow. While these banks were acquired it is important to realize that not every failed bank is bought. If your bank fails and it is not bought anything over the FDIC guarantee limit may not be covered, food for thought.

The Park Avenue Bank:

The Park Avenue Bank, New York, New York, was closed today by the New York State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Valley National Bank, Wayne, New Jersey, to assume all of the deposits of The Park Avenue Bank.

The four branches of The Park Avenue Bank will reopen during normal business hours beginning tomorrow as branches of Valley National Bank. Depositors of The Park Avenue Bank will automatically become depositors of Valley National Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Valley National Bank that it has completed systems changes to allow other Valley National Bank branches to process their accounts as well.

This evening and over the weekend, depositors of The Park Avenue Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of December 31, 2009, The Park Avenue Bank had approximately $520.1 million in total assets and $494.5 million in total deposits. Valley National Bank will pay the FDIC a premium of 0.15 percent to assume all of the deposits of The Park Avenue Bank. In addition to assuming all of the deposits of the failed bank, Valley National Bank agreed to purchase essentially all of the assets.

The FDIC and Valley National Bank entered into a loss-share transaction on $379.8 million of The Park Avenue Bank’s assets. Valley National Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-640-2538. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 3:00 p.m., EST; on Sunday from 9 a.m. to 3:00 p.m., Eastern Daylight Time (EDT); and thereafter from 8:00 a.m. to 8:00 p.m., EDT.

As part of this transaction, the FDIC will acquire a cash appreciation instrument. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $50.7 million. Valley National Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives. The Park Avenue Bank is the 28th FDIC-insured institution to fail in the nation this year, and the second in New York. The last FDIC-insured institution closed in the state was LibertyPointe Bank, New, York, New York, on March 11, 2010.

Old Southern Bank:

Old Southern Bank, Orlando, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Centennial Bank, Conway, Arkansas, to assume all of the deposits of Old Southern Bank.

The seven branches of Old Southern Bank will reopen on Monday as branches of Centennial Bank. Depositors of Old Southern Bank will automatically become depositors of Centennial Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their former Old Southern Bank branch until they receive notice from Centennial Bank that it has completed systems changes to allow other Centennial Bank branches to process their accounts as well.

This evening and over the weekend, depositors of Old Southern Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of December 31, 2009, Old Southern Bank had approximately $315.6 million in total assets and $319.7 million in total deposits. Centennial Bank will pay the FDIC a premium of 1.00 percent to assume all of the deposits of Old Southern Bank. In addition to assuming all of the deposits, Centennial Bank agreed to purchase essentially all of the failed bank’s assets.

The FDIC and Centennial Bank entered into a loss-share transaction on $282.7 million of Old Southern Bank’s assets. Centennial Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-822-1918. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 6:00 p.m., EST; on Sunday from noon to 6:00 p.m., Eastern Daylight Time Eastern Daylight Time (EDT); and thereafter from 8:00 a.m. to 8:00 p.m., EDT.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $94.6 million. Centennial Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives. Old Southern Bank is the 29th FDIC-insured institution to fail in the nation this year, and the fourth in Florida. The last FDIC-insured institution closed in the state was Marco Community Bank, Marco Island, February 19, 2010

Statewide Bank:

Statewide Bank, Covington, Louisiana, was closed today by the Louisiana Office of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Home Bank, Lafayette, Louisiana, to assume all of the deposits of Statewide Bank.

The six branches of Statewide Bank will reopen on Saturday as branches of Home Bank. Depositors of Statewide Bank will automatically become depositors of Home Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their former Statewide Bank branch until they receive notice from Home Bank that it has completed systems changes to allow other Home Bank branches to process their accounts as well.

This evening and over the weekend, depositors of Statewide Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of December 31, 2009, Statewide Bank had approximately $243.2 million in total assets and $208.8 million in total deposits. Home Bank did not pay the FDIC a premium to assume all of the deposits of Statewide Bank. In addition to assuming all of the deposits, Home Bank agreed to purchase essentially all of the failed bank’s assets.

The FDIC and Home Bank entered into a loss-share transaction on $163.5 million of Statewide Bank’s assets. Home Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-913-3062. The phone number will be operational this evening until 9:00 p.m., Central Standard Time (CST); on Saturday from 9:00 a.m. to 6:00 p.m., (CST); on Sunday from noon to 6:00 p.m., Central Daylight Time (CDT); and thereafter from 8:00 a.m. to 8:00 p.m., (CDT).

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $38.1 million. Home Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives. Statewide Bank is the 30th FDIC-insured institution to fail in the nation this year, and the first in Louisiana. The last FDIC-insured institution closed in the state was The Farmers Bank & Trust of Cheneyville, Cheneyville, December 17, 2002

Out of the blue the LibertyPointe Bank in NY was closed tonight and the branches will open under Valley National Bank, who bought the assets, on Friday morning. It is odd that a bank is closed on a Thursday, it happens, but not that often and shows just how troubled the banking industry is. To assume the troubles are over and everything is fine is a bit premature in my book.

Oh, the FDIC only lost a mere $24M tonight and entered a loss-share agreement for $181.5M.

Here is the rundown on LibertyPointe Bank:

LibertyPointe Bank, New York, New York, was closed today by the New York State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Valley National Bank, Wayne, New Jersey, to assume all of the deposits of LibertyPointe Bank.

The three branches of LibertyPointe Bank will reopen on Friday as branches of Valley National Bank. Depositors of LibertyPointe Bank will automatically become depositors of Valley National Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. LibertyPointe Bank customers should continue to use their existing branches until they receive notice from Valley National Bank that it has completed systems changes to allow other Valley National Bank branches to process their accounts as well.

This evening, Friday, and over the weekend, depositors of LibertyPointe Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of December 31, 2009, LibertyPointe Bank had approximately $209.7 million in total assets and $209.5 million in total deposits. Valley National Bank will pay the FDIC a premium of 0.15 percent to assume all of the deposits of LibertyPointe Bank. In addition to assuming all of the deposits, Valley National Bank agreed to purchase essentially all of the failed bank’s assets.

The FDIC and Valley National Bank entered into a loss-share transaction on $181.5 million of LibertyPointe Bank’s assets. Valley National Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-591-2820. The phone number will be operational this evening from the time of closing until 9:00 p.m., Eastern Standard Time (EST); on Friday from 9:00 a.m. to 6:00 p.m., EST; on Saturday from 9:00 a.m. to 3:00 p.m., EST; on Sunday from 9:00 a.m. to 3:00 p.m., Eastern Daylight Time (EDT); and thereafter from 8:00 a.m. to 8:00 p.m., EDT.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $24.8 million. Valley National Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives. LibertyPointe Bank is the 27th FDIC-insured institution to fail in the nation this year, and the first in New York. The last FDIC-insured institution closed in the state was Waterford Village Bank, Williamsville, July 24, 2009.

H/T to Mark for the tip

Little attention has been given to the main Friday events this year, I am guilt of not reporting on it either, which is bank failures. I guess everyone, me included, has become complacent with the fact that banks are failing at a very scary rate still. I am thinking that the Fed should have left the discount rate along as we are now up to 25 bank closures this year, 3 tonight (see below). At this rate we will see, assuming February is the example of what the rest of the year holds, we will see upwards of 180 bank failures for 2010. I thought the crisis was over?

Clearly there are major structural problems within the banking system still. Although the “too big to fails” will remain, well, too big to fail the smaller banks are up the creek without a paddle. Clearly whatever plan the administration had in mind for these smaller institutions has not worked or the problems are so severe that no one wants to talk about them. I think the latter is probably more likely than the former. Either way, these failures are a major problem especially as the FDIC is technically bankrupt, what else do you call an organization that has a substantial negative net worth? Obviously that lifeline with the Treasury will have to be tapped in order to guarantee the $250,000 per deposit.

Tonight’s winners are:

I guess the losses are not that bad, but given the sorry state of the FDIC I think any loss is bad news. So much for the FDIC’s national savings week push, why save when your bank goes out of business?

Waterfield Bank had no buyer, apparently, but the other 2 banks did have buyers. As you can see the losses are pretty severe given the asset size of the banks. All told losses could hit $808.1M if the FDIC needs to make good on the loss-share agreements, certainly some of the loss-share will be realized if not all of it. Bank of Illinois was purchased by Heartland Bank and Trust Company out of, get this, Normal Illinois and Sun American Bank was acquired by First-Citizens Bank out of Boca Raton FL.

Centennial Bank and Waterfield Bank had deposits of $1.8M and $407,000, respectively, not covered by the FDIC insurance, keep no more than the maximum insured limit at banks, especially smaller banks. There may be more closures later tonight so check back. Below are the press releases.

Waterfield Bank:

Waterfield Bank, Germantown, Maryland, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the insured depositors, the FDIC created Waterfield Bank, FA—a new depository institution chartered by the OTS and insured by the FDIC—to take over the operations of Waterfield Bank. The new institution will remain open until April 5, 2010, to allow depositors access to their insured funds and time to move accounts to other insured institutions.

The bank had one branch location. It also took deposits from customers via the Internet and 38 affinity groups.

At the time of closing, the receiver immediately transferred to Waterfield Bank, FA, all insured deposits of the failed bank, except certificates of deposits (CDs) and individual retirement accounts (IRAs). The FDIC will mail checks directly to customers with CDs and IRAs for the amount of their insured funds, on Monday morning, March 8.

Customers with savings accounts, checking accounts and money market deposit accounts will have access to their insured funds as usual during this transitional period. Banking activities, such as direct deposit, check writing, and ATM and debit card use, will continue as normal for the customers with demand deposit accounts until Waterfield Bank, FA, closes on April 5. At the end of this transition period, the FDIC will mail checks to customers who have not closed their accounts or transferred their funds to another institution.

On-line banking services, including bill pay, will be unavailable for transactions over the weekend; however, these systems will be active by Monday morning, March 8.

As of December 31, 2009, Waterfield Bank had $155.6 million in assets and $156.4 million in deposits. At the time of closing, the amount of deposits exceeding the insurance limits totaled about $407,000. This amount is an estimate and is likely to change as the FDIC works with customers of Waterfield Bank. The uninsured deposits were not transferred to the newly chartered institution.

Depositors with more than $250,000 at Waterfield Bank should call the FDIC at (800) 830-4735 to make an appointment to discuss the status of their funds. The phone number will be operational this evening until 11:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 9:00 p.m., EST; on Sunday from noon to 6:00 p.m., EST; and thereafter from 8:00 a.m. to 8:00 p.m., EST.

Customers who would like more information about today’s transaction can call the toll-free number; send an e-mail to waterfieldbankquestions@fdic.gov.

Under the FDI Act, the FDIC may create a new depository institution to ensure that depositors have continued access to their insured funds where no other bank has agreed to assume the insured deposits. This arrangement allows for uninterrupted direct deposits and automated payments from customers’ accounts and allows them time to find another institution with which to do business.

The FDIC estimates that the cost to its Deposit Insurance Fund will be $51.0 million. Waterfield Bank is the 25th bank to fail in the nation this year and the first in Maryland. The last FDIC-insured institution to fail in the state was Bradford Bank, Baltimore, on August 28, 2009.

Bank of Illinois:

Bank of Illinois, Normal, Illinois, was closed today by the Illinois Department of Financial Professional Regulation – Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Heartland Bank and Trust Company, Bloomington, Illinois, to assume all of the deposits of Bank of Illinois.

The two branches of Bank of Illinois will reopen on Saturday as branches of Heartland Bank and Trust Company. Depositors of Bank of Illinois will automatically become depositors of Heartland Bank and Trust Company. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Heartland Bank and Trust Company that it has completed systems changes to allow other Heartland Bank and Trust Company branches to process their accounts as well.

This evening and over the weekend, depositors of Bank of Illinois can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of December 31, 2009, Bank of Illinois had approximately $211.7 million in total assets and $198.5 million in total deposits. Heartland Bank and Trust Company will pay the FDIC a premium of 3.61 percent to assume all of the deposits of Bank of Illinois. In addition to assuming all of the deposits of the failed bank, Heartland Bank and Trust Company agreed to purchase essentially all of the assets.

The FDIC and Heartland Bank and Trust Company entered into a loss-share transaction on $166.6 million of Bank of Illinois’s assets. Heartland Bank and Trust Company will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $53.7 million. Heartland Bank and Trust Company’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives. Bank of Illinois is the 24th FDIC-insured institution to fail in the nation this year, and the third in Illinois. The last FDIC-insured institution closed in the state was George Washington Savings Bank, Orland Park, on February 19, 2010.

Sun American Bank:

Sun American Bank, Boca Raton, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First-Citizens Bank & Trust Company, Raleigh, North Carolina, to assume all of the deposits of Sun American Bank.

The 12 branches of Sun American Bank will reopen on Monday as branches of First-Citizens Bank & Trust Company. Depositors of Sun American Bank will automatically become depositors of First-Citizens Bank & Trust Company. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from First-Citizens Bank & Trust Company that it has completed systems changes to allow other First-Citizens Bank & Trust Company branches to process their accounts as well.

This evening and over the weekend, depositors of Sun American Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of December 31, 2009, Sun American Bank had approximately $535.7 million in total assets and $443.5 million in total deposits. First-Citizens Bank & Trust Company did not pay a premium to acquire the deposits of Sun American Bank. In addition to assuming all of the deposits of the failed bank, First-Citizens Bank & Trust Company agreed to purchase essentially all of the assets.

The FDIC and First-Citizens Bank & Trust Company entered into a loss-share transaction on $433.0 million of Sun American Bank’s assets. First-Citizens Bank & Trust Company will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-866-954-9532. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 6:00 p.m., EST; on Sunday from noon to 6:00 p.m., EST; and thereafter from 8:00 a.m. to 8:00 p.m., EST.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $103.8 million. First-Citizens Bank & Trust Company’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives. Sun American Bank is the 23rd FDIC-insured institution to fail in the nation this year, and the fourth in Florida. The last FDIC-insured institution closed in the state was Marco Community Bank, Marco Island, on February 19, 2010.

Centennial Bank:

The Federal Deposit Insurance Corporation (FDIC) approved the payout of the insured deposits of Centennial Bank, Ogden, Utah. The bank was closed today by the Utah Department of Financial Institutions, which appointed the FDIC as receiver.

The FDIC entered into an agreement with Zions First National Bank, Salt Lake City, Utah, to accept the failed bank’s direct deposits from the federal government, such as Social Security and Veterans’ payments.

The FDIC was unable to find another financial institution to take over the banking operations of Centennial Bank. As a result, checks to the retail depositors for their insured funds will be mailed on Monday. Brokered deposits will be wired once brokers provide the FDIC with the necessary documents to determine if any of their clients exceed the insurance limits. Customers who placed money with brokers should contact them directly for more information about the status of their funds.

As of December 31, 2009, Centennial Bank had approximately $215.2 million in total assets and $205.1 million in total deposits. At the time of closing, the bank had an estimated $1.8 million in uninsured funds. This amount is an estimate that is likely to change once the FDIC obtains additional information from these customers.

Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-889-4976. Customers with accounts in excess of $250,000 also should contact the toll-free number to set up an appointment to discuss their deposits. The phone number will be operational this evening until 9:00 p.m. Mountain Standard Time (MST); on Saturday from 9:00 a.m. to 6:00 p.m. MST; and on Sunday from noon to 6:00 p.m. MST; and thereafter from 8:00 a.m. to 8:00 p.m. MST.

Beginning on Monday, customers of Centennial Bank with deposits exceeding $250,000 at the bank may visit the FDIC’s Web page “Is My Account Fully Insured?” at https://www2.fdic.gov/drrip/afi/index.asp.

Centennial Bank is the 26th FDIC-insured institution to fail this year and the second in Utah since Barnes Banking Company, Kaysville, was closed on January 15, 2010. The FDIC estimates the cost of the failure to its Deposit Insurance Fund to be approximately $96.3 million.

This seems to get no press anymore, but we still have banks failing at a record rate. Tonight we have 3 more bank failures, Republic Federal Bank out of Miami, Solutions Bank out of Overland Park KS and Valley Capital Bank out of Mesa AZ. Last week we had 6 bank failures and year-to-date we have a total of 133 banks that have failed. Nothing to see here, everything is fine so keep buying stocks as there is no risk. Even though we have the smart money, the credit markets, keeping short-term treasuries near zero.

I am sorry, but when the smart money is saying. pay me nothing for up to 6 months and we are having banks fail at a record rate there is a problem. Retail sales may be up, we may have a stimulus induced GDP pump, mostly because of a devalued dollar, which is coming to an end quickly here, but there is no real recovery. The employment reports are showing zero hiring as the average worker is looking for work, and giving up, after a record 27+ weeks and is either removed from the labor force or placed on the EUC and no longer counted. These are all signs that something is about to happen.

Today’s Failures:

Estimated FDIC Losses, including loss-share agreements:

Not bad for an organization that is already running in the red. I guess it is a good thing Congress just decided to raise the debt ceiling by $1.8T to just about $14T altogether. It is shocking that the dollar actually went up in value today, but it is merely short covering and once people realize that Ben will never raise interest rates, see failed bank list total above, ever again I am sure the dollar will come down again.

Even as the FDIC is technically broke, it still has to make good on deposits held with failed institutions which probably explains why this Friday we saw the first failure reported so late as the FDIC had to search for a buyer. Warren Bank of Michigan failed and Huntington National Bank, out of Columbus OH, has assumed all its deposits.

Surprisingly, Huntington will buy some of the assets from the closure, only $83M, but it’s better than the FDIC buying all of them, since they are strapped for cash at the moment. This leaves the FDIC in the hole for $275M in this closure, with, surprisingly, no loss-share agreement in place. We will see if there are more closings on the West coast later tonight.
Winner number 2 is Jennings State Bank out of Minnesota. Central Bank will assume all deposits of the failed institution. This represents the 97th bank closure this year.

The FDIC will incur a loss of $11.7M and will enter into a loss-share agreement with Central Bank for $37.5M.

Winner number 3 is Southern Colorado National Bank. Legacy Bank is assuming deposits of the failed institutions. This makes 98 failed banks this year.

The FDIC will lose $6.6M due to this failure and will enter into a loss-share agreement for $25.5M with Legacy.

Bank____________State_____________Assets_______________Deposits
Warren Bank______MI_______________$538M_______________$501M
Jennings State Bank_MN______________$56.3M______________$52.4M
Colorado National___CO______________$39.5M______________$31.9M

So far tonight the FDIC has lost $292.6M and entered into loss-share agreements for $63M, not bad for a Friday night when you have no money in the bank. It must be great to be the government.

Warren Bank:

Warren Bank, Warren, Michigan, was closed today by the Michigan Office of Financial and Insurance Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with The Huntington National Bank, Columbus, Ohio, to assume all of the deposits of Warren Bank.

The six branches of Warren Bank will reopen on Saturday as branches of The Huntington National Bank. Depositors of Warren Bank will automatically become depositors of The Huntington National Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from The Huntington National Bank that it has completed systems changes to allow other Huntington branches to process their accounts as well.

Jennings State Bank:

Jennings State Bank, Spring Grove, Minnesota, was closed today by the Minnesota Department of Commerce, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Central Bank, Stillwater, Minnesota, to assume all of the deposits of Jennings State Bank.

The two branches of Jennings State Bank will reopen on Saturday as branches of Central Bank. Depositors of Jennings State Bank will automatically become depositors of Central Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Central Bank that it has completed systems changes to allow other Central branches to process their accounts as well.

Colorado National Bank:

Southern Colorado National Bank, Pueblo, Colorado, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Legacy Bank, Wiley, Colorado, to assume all of the deposits of Southern Colorado National Bank.

The two branches of Southern Colorado National Bank will reopen on Saturday as branches of Legacy Bank. Depositors of Southern Colorado National Bank will automatically become depositors of Legacy Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Legacy Bank that it has completed systems changes to allow other Legacy branches to process their accounts as well.

With 81 banks closed this year and estimates of a total of 150-200 bank closures in the near future it is no wonder that the FDIC eased rules for private equity firms to bid on the failed institutions. It is amazing that it took so long for the FDIC to make this decision, considering the firm has had to cover significant losses this year. By allowing private equity firms it also elevates another problem, finding buyers for the closed banks.

Most of the 81 banks closed this year were smaller institutions, but this recent action by the FDIC leads me to believe that bigger banks will begin to fail. Of course, there is no real way to know which banks are on the FDIC’s troubled institutions list, currently around 300 banks are on this list, which makes it difficult to know what size the potential failures could be. However, we do know that the current losses or loss-share agreements with this year’s closures has strained the balance sheet of the FDIC, roughly $28B YTD. Now, loss share agreements do not necessarily mean that the FDIC will actually have to pay up on the whole amount, but it certainly will have to cover some of those losses.

Either way, the FDIC had to make some decisions to shield itself, in my opinion, because the losses, over $3B last week alone, are becoming horrendous. Not only that, but buyers will be tougher to find as the bigger institutions, like JP Morgan and Bank of America, are unwilling or unable to buy these smaller operations. Smaller banks are certainly interested, but they may not have the capital to merge the institutions without substantial help from the FDIC, which kind of defeats the purpose of finding a buyer. Keep in mind, the FDIC needed to raise premiums from its bigger banks in order to shore up its balance sheet, but that will not be enough according to some reports.

However, with private equity firms there is now ample capital to absorb these smaller banks. I am not sure if this is a good idea or just an idea out of necessity, but it passed and now we will certainly see firms like Bain Capital, Carlyle Group, etc. now owning banks. Whether they have a genuine interest in running the troubled institutions, who really knows, but what is certain is this move will help the FDIC, maybe.

Private equity firms are not dumb people, obviously, and if they acquire a bank then they will want some type of loss-share agreement and may decide to not buy certain assets of the banks. In itself that is not that big of a deal, but since these firms are not banking institutions to begin with it is likely that they will drive a harder bargain to get the deal done, especially if there is not another traditional bidder in the picture. It is possible that the FDIC could have to guarantee against more losses than typical bank failures, but only time will tell.

What we know for sure is that the failures will increase dramatically in the next few months. I will continue to monitor the failures every Friday night and provide you with a running total of bank closures, where they were located, the asset base, deposit base and the estimated losses the FDIC may incur. So be sure to check back at 6:30 EST on Fridays for closures on the East coast and 9:30 for West coast closures.

Guaranty Bank of Texas is now closed, I’ve been waiting for this one. A $13 Billion dollar organization, gone as their future was left in limbo for some time now, but there it is. This brings to total closures to 4 tonight and a running total of 81 banks closed this year. Probably one more in the West tonight as well, stay tuned.

In addition to ebank, 2 more banks were closed tonight, bringing the total to 80. As of right now, First Coweta of Georgia and CapitalSouth Bank of Alabama were also shuttered tonight.

Bank______________Assets________________Deposits

Guaranty Bank______$13B________________$12B

eBank_____________$143M_______________$130M

CapitalSouth Bank___$617M_______________$546M

First Coweta________$167M_______________$155M

Total estimated losses for the FDIC: $3.262 Billion

Total loss-share agreements with the FDIC: $734 million

The West Coast still has an hour to go before banks close, so there probably will be more shortly. Below is the summary of the FDIC press releases.

Guaranty Bank:

As of June 30, 2009, Guaranty Bank had total assets of approximately $13 billion and total deposits of approximately $12 billion. In addition to assuming all of the deposits of the failed bank, BBVA Compass agreed to purchase $12 billion of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and BBVA Compass entered into a loss-share transaction on approximately $11 billion of Guaranty Bank’s assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $3 billion.

CapitalSouth Bank:

CapitalSouth Bank, Birmingham, Alabama, was closed today by the Alabama State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with IBERIABANK, Lafayette, Louisiana, to assume all of the deposits of CapitalSouth Bank, excluding those from brokers.

As of June 30, 2009, CapitalSouth Bank had total assets of $617 million and total deposits of approximately $546 million. In addition to assuming all of the deposits of the failed bank, IBERIABANK agreed to purchase $589 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and IBERIABANK entered into a loss-share transaction on approximately $499 million of CapitalSouth Bank’s assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $151 million.

First Coweta:

First Coweta, Newnan, Georgia was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with United Bank, Zebulon, Georgia, to assume all of the deposits of First Coweta, excluding those from brokers.

As of July 31, 2009, First Coweta had total assets of $167 million and total deposits of approximately $155 million. United Bank will pay the FDIC a premium of 1.01 percent to assume all of the deposits of First Coweta. In addition to assuming all of the deposits of the failed bank, United Bank agreed to purchase $155 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and United Bank entered into a loss-share transaction on approximately $124 million of First Coweta’s assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $48 million.

eBank:

ebank, Atlanta, Georgia, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Stearns Bank, National Association, St. Cloud, Minnesota, to assume all of the deposits of ebank.

As of July 10, 2009, ebank had total assets of $143 million and total deposits of approximately $130 million. In addition to assuming all of the deposits of the failed bank, Stearns Bank, N.A. agreed to purchase essentially all of the failed bank’s assets.

The FDIC and Stearns Bank, N.A. entered into a loss-share transaction on approximately $111 million of ebank’s assets. Stearns Bank, N.A. will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $63 million. Stearns Bank, N.A.’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to alternatives. ebank is the 78th FDIC-insured institution to fail in the nation this year, and the seventeenth in Georgia. The last FDIC-insured institution closed in the state was Security Bank of Jones County, Gray, on July 24, 2009.

In addition to ebank, 2 more banks were closed tonight, bringing the total to 80. As of right now, First Coweta of Georgia and CapitalSouth Bank of Alabama were also shuttered tonight.

Bank______________Assets________________Deposits

eBank_____________$143M_______________$130M

CapitalSouth Bank___$617M_______________$546M

First Coweta________$167M_______________$155M

Total estimated losses for the FDIC: $262 million

Total loss-share agreements with the FDIC: $734 million

The West Coast still has an hour to go before banks close, so there probably will be more shortly. Below is the summary of the FDIC press releases.

CapitalSouth Bank:

CapitalSouth Bank, Birmingham, Alabama, was closed today by the Alabama State Banking Department, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with IBERIABANK, Lafayette, Louisiana, to assume all of the deposits of CapitalSouth Bank, excluding those from brokers.

As of June 30, 2009, CapitalSouth Bank had total assets of $617 million and total deposits of approximately $546 million. In addition to assuming all of the deposits of the failed bank, IBERIABANK agreed to purchase $589 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and IBERIABANK entered into a loss-share transaction on approximately $499 million of CapitalSouth Bank’s assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $151 million.

First Coweta:

First Coweta, Newnan, Georgia was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with United Bank, Zebulon, Georgia, to assume all of the deposits of First Coweta, excluding those from brokers.

As of July 31, 2009, First Coweta had total assets of $167 million and total deposits of approximately $155 million. United Bank will pay the FDIC a premium of 1.01 percent to assume all of the deposits of First Coweta. In addition to assuming all of the deposits of the failed bank, United Bank agreed to purchase $155 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and United Bank entered into a loss-share transaction on approximately $124 million of First Coweta’s assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $48 million.

eBank:

ebank, Atlanta, Georgia, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Stearns Bank, National Association, St. Cloud, Minnesota, to assume all of the deposits of ebank.

As of July 10, 2009, ebank had total assets of $143 million and total deposits of approximately $130 million. In addition to assuming all of the deposits of the failed bank, Stearns Bank, N.A. agreed to purchase essentially all of the failed bank’s assets.

The FDIC and Stearns Bank, N.A. entered into a loss-share transaction on approximately $111 million of ebank’s assets. Stearns Bank, N.A. will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $63 million. Stearns Bank, N.A.’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to alternatives. ebank is the 78th FDIC-insured institution to fail in the nation this year, and the seventeenth in Georgia. The last FDIC-insured institution closed in the state was Security Bank of Jones County, Gray, on July 24, 2009.

Number 78 bites the dust, eBank of GA was just seized by the FDIC.

As of July 10, 2009, ebank had total assets of $143 million and total deposits of approximately $130 million. In addition to assuming all of the deposits of the failed bank, Stearns Bank, N.A. agreed to purchase essentially all of the failed bank’s assets.

The FDIC and Stearns Bank, N.A. entered into a loss-share transaction on approximately $111 million of ebank’s assets. Stearns Bank, N.A. will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector. The agreement also is expected to minimize disruptions for loan customers.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $63 million. Stearns Bank, N.A.’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to alternatives. ebank is the 78th FDIC-insured institution to fail in the nation this year, and the seventeenth in Georgia. The last FDIC-insured institution closed in the state was Security Bank of Jones County, Gray, on July 24, 2009.

See the loss-share agreement, plus the expected cost of $63M directly to the FDIC. More in a little bit, I am sure.