Last Weeks Bank Closings

Posted By on May 2, 2010

The information on this week’s bank closings is staggering. The FDIC announced seven closings as of April 30, 2010, at 9:00 pm EST.

The seven banks’ combined assets amount to $25.83 billion. They had combined deposits of $19.61 billion.

The FDIC is projecting losses of $7.33 billion in connection with the seven closings. That is its “optimistic” estimate based on its having entered into loss share agreements on $19.76 billion of the failed banks’ assets.

That $7.33 billion amounts to about 37% of deposits. Based on that estimate, the real market value of the seven banks’ assets was about $12.28 billion and had been over-stated, on average, by 110%.

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