It’s FDIC Friday – only one bank shut today – Horizon Bank out in Washington State. The bank had a little over $1 Billion in deposits and assets.
The shocking part to me (and may not be new) is just how bad a bank has to be to make it to the top of the list. The FDIC expects the closure to cost the FDIC $539 million, meaning that by the time they closed the bank, half of all the assets were “gone”. Maybe I overlooked a decimal point..
The FDIC is now about $8 billion in the red and this is another “loss sharing” agreement. The FDIC has no cash to offer a “healthy” bank to take over the loan portfolio of the failed bank – so they hand over a promise to make good on the bad loans in the future – which the “good” bank can then put onto their balance sheet without the FDIC having to turn over any cash.
And Bernie Madoff is in jail?
