Bank Failures Take Holiday

A shocking bit of news on Friday came from the Federal Deposit Insurance Corporation, which didn't announce any bank or thrift closings, setting the agency up for its first weekend off in a month.

Because we have no new failures to discuss this week, this is a good time to recap the 19 failures so far this year.

Many of the figures for estimated losses to the FDIC's insurance fund, uninsured deposits and dividends paid on uninsured balances have changed since the original press releases announcing each failure.

When a bank or thrift is closed by a regulator and then placed in FDIC receivership, the FDIC then assesses the institution's assets and liabilities, and selects a buyer or buyers by determining which deal will lead to the smallest possible loss for the agency's deposit insurance fund.

In 12 out of 19 failures this year, the agency was able to sell all of the failed institution's deposits, including uninsured balances, thus leaving depositors with no losses -- a remarkable achievement, since this included Washington Mutual, which had a combined $45 billion in its two federal thrift charters, as of June 30.

2008 Bank and Thrift Failures ($Mil)

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For the other failed institutions, depositors with account balances exceeding deposit insurance limits became creditors to the FDIC receivership for the uninsured balances. Any payments received from the FDIC on these balances are called "dividends."

When announcing a bank or thrift failure with uninsured deposits not acquired by another institution, the FDIC sometimes announces an immediate payment of a percentage on uninsured balances. This is known as an advance dividend.