FDIC Lost $5.2 Billion Last Week

The Federal Deposit Insurance Corp., which guarantees bank accounts up to $250,000, lost nearly $5.2 billion last week with the failure of a Florida savings institution and two Illinois banks.

Last week's bank failures push the total losses incurred by the FDIC in the first five months of 2009 to more than $10.6 billion. In all of 2008, the FDIC lost between $10.4 billion and $14.9 billion, according to a new report from Condo Vultures® LLC using regulatory data.

"The FDIC is losing an average of $2 billion per month with bank failures," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "We expect this trend to continue given that the FDIC plans to open a 500-person bank seizure in asset sales office in Jacksonville, Fla., in September to deal with troubled banks in the Southeast and especially Florida."

Of the 36 banks shut by regulators in 2009, only three have been in Florida even though the sunshine state is considered by many to be the epicenter of the U.S. housing crash.

The most recent failure was on Thursday, May 21, with regulators shuttered Florida's largest institution, BankUnited. Headquartered in suburban Miami, BankUnited had $12.8 billion in assets, $8.6 billion in deposits, and more than 80 branch locations throughout Florida.

BankUnited's failure is estimated to cost the FDIC about $4.9 billion, making it the largest bank failure since July 2008 when IndyMac was seized.

IndyMac Bank was a California-based institution with $32 billion in assets and $19 billion in deposits. The IndyMac failure cost the FDIC between $4 billion and $8 billion.

The two Illinois banks to be closed last week on May 22 were Strategic Capital Bank and Citizens National Bank.

Strategic Capital Bank had assets of $537 million and deposits of $471 million. The FDIC's estimated loss from Strategic Capital Bank is $173 million.

Citizens National Bank had assets of $437 million and deposits of $400 million. The FDIC's estimated loss from Citizens National Bank is $106 million.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

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