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Wednesday, May 27, 2009

U.S. ‘Problem’ Banks Highest Since 1994

by Calculated Risk on 5/27/2009 10:58:00 AM

The FDIC released the Q1 Quarterly Banking Profile today. The FDIC listed 305 banks with $220.0 billion in assets as “problem” banks in Q1, up from 252 and $159.4 billion in assets in Q4.

Note: Not all problem banks will fail - and not all failures will be from the problem bank list - but this shows the problem is significant and still growing.

Here are two graphs from the FDIC:

Problem BanksProblem Banks

And on the Deposit Insurance Fund:
The Deposit Insurance Fund (DIF) decreased by 24.7 percent ($4.3 billion) during the first quarter to $13,007 million (unaudited). Accrued assessment income added $2.6 billion to the DIF during the quarter. Interest earned combined with realized gains and unrealized losses on securities added $17 million to the DIF. Operating and other expenses net of other revenue reduced the fund by $264 million. The reduction in the DIF was primarily due to a $6.6 billion increase in loss provisions for actual and anticipated insured institution failures.

The DIF’s reserve ratio equaled 0.27 percent on March 31, 2009, down from 0.36 percent at December 31, 2008, and 1.19 percent a year ago. The March 31, 2009 reserve ratio is the lowest reserve ratio for a combined bank and thrift insurance fund since March 31, 1993, when the reserve ratio was 0.06 percent.

Twenty-one FDIC-insured institutions with combined assets of $9.5 billion failed during the first quarter of 2009, at an estimated cost to the DIF of $2.2 billion. Between March 31, 2008 and March 31, 2009, 44 insured institutions with combined assets of $381.4 billion failed, at an estimated cost to the DIF of $20.1 billion.
DIF Reserve Ratios