Bank Failure Friday - 5 more on the Funeral Pyre, toll now 120

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5 more bank failures including United Commercial, a San Francisco bank which will cost the FDIC $1.4 billion.

United Commercial Bank had total assets of $11.2 billion and total deposits of approximately $7.5 billion. The FDIC and East West Bank entered into a loss-share transaction on approximately $7.7 billion of United Commercial Bank’s assets. The failure is expected to cost the FDIC deposit insurance fund an estimated $1.4 billion.

The others are, with their FDIC costs:

  • United Security Bank of Sparta, Georgia - $58 million
  • Home Federal Savings Bank of Detroit - $5.4 million
  • Minnesota-based Prosperan Bank of Oakdale - $60.1 million
  • Missouri-based Gateway Bank of St. Louis - $9.2 million

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United Commercial Bank loses increase

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The very late night failure of United Commercial Bank is significant for several reasons. By being bought by Pasadena's East West Bancorp, this becomes the dominant bank for Chinese Americans. It was the 4th largest bank to fail this year.
But the key point is that it was a TARP recipient.

United Commercial's collapse may cause a greater-than-usual stir because a year ago the federal government invested $299 million in bailout funds in the bank in exchange for preferred stock, which was made worthless by the failure.
In addition, the FDIC said the collapse would cost the federal deposit insurance fund an estimated $1.4 billion.

Financial Armageddon good post on CRE

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here.

He's pointing to the many experts who cannot believe Geithner is blowing off the 9% default rates going on in CRE as "not a problem".

They mention a resort in AZ having a massive default. I've been to that place and it is super nice, well run. It's shocking they went into default...