Regulators shut two more banks - one in Nevada and another in Illinois - on Friday, increasing the total number of failed institutions to 10 for the month of February and 16 for the year.
Security Savings Bank in Greater Las Vegas with assets of $238 million and Heritage Community Bank outside of Chicago with assets of $233 million were seized by regulators on Feb. 27.
Losses from these latest two failures are estimated to cost about $101 million, according to the Federal Deposit Insurance Corp., which was named receiver of both institutions.
Bank failures in the first two months of 2009 are expected to cost the FDIC more than $1.7 billion.
At this pace of about $867,000 in losses a month, the total write off for the FDIC for the year would be more than $10 billion, according to a new report from Condo Vultures® LLC.
In 2008, the FDIC's estimated losses on 25 bank failures were between $10.4 billion and $14.9 billion.
"The FDIC is on pace to shut down four times the number of banks in 2009 compared to 2008," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "Despite the dramatic surge in the number of bank failures this year, the total loss to the FDIC in dollars is on pace to be relatively the same as in 2008 on a year-over-year basis. That is, unless a regional financial institution the size of IndyMac Bank goes down again."
In July 2008, IndyMac Bank, a California institution with $32 billion in assets and $19 billion in deposits, was seized by regulators in a failure that is estimated to cost the FDIC between $4 billion and $8 billion.
On a state-by-state basis, California and Illinois lead the nation in the number of 2009 bank failures with three shuttered institutions each. Florida and Oregon are next with two bank failures each.
The remainder of the failed banks is comprised of one shuttered financial institution in each of the following states: Georgia, Maryland, Nebraska, Nevada, Utah, and Washington.
Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter's blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures DatabaseTM .
Copyright © 2009, Condo Vultures® LLC
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