Like clockwork, every Friday seems to bring two things: Some sort of bad news dump from the Obama administration and a list of bank failures. We had the bad news from Obama just as he skipped off on vacation. And here’s the bank failures:
Guaranty Bank was closed by federal regulators Friday in the third largest bank failure this year bringing the total number of failures to 81 in 2009.
The Federal Deposit Insurance Corporation was named receiver of the Austin, TX-based thrift, which had approximately $13 billion in assets and $12 billion in deposits as of June.
BBVA Compass, a U.S. subsidiary of Spanish bank Banco Bilbao Vizcaya Argentaria, agreed to assume all of Guaranty’s deposits and will buy $12 billion of its assets. The FDIC said it would share losses on $11 billion of the failed bank’s assets.
The 162 branches that Guaranty operated in Texas and California will reopen Monday as branches of BBVA Compass, which is based in Birmingham, Ala.
Guaranty was the third largest bank to fail in 2009. It tied for the title of 11th largest bank failure in U.S. history with First City Bancorporation, which failed in 1988.
There were three others as well. The media keeps cheerfully reporting how the economy is turning around and things are looking up.
We are unsure of what they are smoking, but it appears to be very strong stuff.
This is another hit on the rapidly-shrinking FDIC funds. (Here’s the FDIC page that lists bank failures since 1934). We are not seeing the highest number of failures ever recorded, but this is still not exactly what one would call a bright spot for the economy.
Putting together a few recent news items draws an even uglier picture: A list of banks with too many bad loans, home loan delinquencies at a record 9.24% (and an unexpected jump in the number of unemployed) plus the announcement that the deficit will be 30% greater than Obama predicted. Bleak. Very bleak.
