FDIC Bank Failures Still Mounting

Over 100 banks have failed this year and Federal Deposit Insurance Corp. officials expect the failure rate will remain at the current pace for the rest of this year and 2010. Seven small FDIC-insurance institutions were closed over the weekend, including Partners Bank, Naples, Fla. "Partners Bank is the 100th FDIC-insured institution to fail this year, and the seventh in Florida," FDIC said. In six of the seven resolutions, the acquiring banks purchased all or a good portion of the failed bank's assets. Four of the resolutions involved loss-sharing agreements where the acquiring bank agrees to purchase most of the assets and FDIC agrees to cover 80% of the losses. "We have been having very good success in having the acquiring institutions take over all of the assets," said FDIC spokesman David Barr. Overall, FDIC estimates that mounting failures will cost the deposit insurance fund $100 billion from 2009 through 2013, including the $27.3 billion it has already incurred from the 106 failures so far this year.