2010 May Be A Rough Year For The FDIC…………..
Posted By thestatedtruth.com on January 9, 2010
Friday evening the FDIC released information regarding the first bank closure of 2010 Horizon Bank of Bellingham, Washington. The statistics regarding this closure are terrible. If it is indicative of things to come it will be a very rough year for the FDIC.
According to the FDIC, Horizon Bank had $1.1 billion in deposits and balance sheet assets of $1.3 billion; yet the FDIC’s estimated cost to close the bank is $539.1 million. That means the real market value of Horizon’s assets is believed to be about $561 million 41.5% of the value claimed. As has become the norm, the FDIC had to enter into a loss-share transaction with respect to $1.0 billion of the assets purchased, meaning there is significant concern the assets will turn out to be worth even less than presently estimated.
This cost of closing this bank amounted to 49% of the value of Horizon’s deposits the highest relative cost seen so far in this crisis. By way of comparison, the cost of closing the first three banks in this crisis (in late 2007) was about 5.7% of deposits.
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