Bank Failure Friday turns it up a notch
Failure #20: Community Bank of Loganville, GA Bank of Essex of Tappahannock, VA will assume Community Bank's deposits and four branches. Community Bank had assets of $681 million, only $84.4 million of which Bank of Essex decided to purchase (The FDIC is stuck with the rest to resolve over time). However, Bank of Essex is assuming all the deposits of Community Bank. The FDIC estimates it will take a hit to the Deposit Insurance Fund of somewhere between $200 million and $240 million.
Failures #21 and #22: Downey Savings and Loan of Newport Beach, CA. and PFF Bank & Trust of Pomona, CA. U.S. Bank of Minneapolis, MN is absorbing the combined 213 branches the two institutions operate and acquired all the deposits. Downey had assets of $12.8 billion and deposits of $9.7 billion as of September 30. PFF had assets of $3.7 billion and deposits of $2.4 billion.
The FDIC says U.S. Bank is purchasing "virtually all" of the two banks' assets. U.S. Bank has agreed to assume the first $1.6 billion of losses on the assets that are covered by a deal between it and the FDIC; the FDIC will then share in any losses above and beyond that level. The FDIC estimates the DIF will take a $1.4 billion hit on the Downey failure and a $700 million beating on the PFF transaction.
So to sum up, we just witnessed the failure of banks with $17.2 billion in assets -- in one weekend. That's not exactly chump change.