California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

It appears the closure of banks in California caused in part by the “Great
Recession” and the corresponding “Credit Crisis” have not only hit bottom,
but it appears the worst is over at least for California banks based upon
the numbers from the Federal Deposit Insurance Corporation, (FDIC).

According to the FDIC, since the beginning of the ”Great Recession” in 2008,
regulators have closed 412 banks and thrifts nationally, specifically as the
credit crisis took hold of the economy. 

The FDIC has identified that these closures have accounted for the following:

• $675.6+ Billion in Total Assets of Failed Institutions
• Estimated Cost to FDIC’s insurance Fund $81.7+ Billion
• Dividends Paid on Uninsured Deposits: $275+ Million
• Uninsured Deposits not Acquired:  $681+ Million

THE NATION
Georgia has had the most bank and thrift failures in the nation at 75 since the
beginning of 2008, with 24 closures in 2011.  Florida follows with 57 bank
failures.  Illinois is next with 47 failures.  California is fourth highest with
38 failures.  Washington State had 18 failures, Minnesota 16 failures, Wisconsin
12 failures, Missouri and Arizona both have had 11 failures each and Nevada and
Texas both have had 10 failures each.

States like Florida, Georgia and Illinois continue to have a high number of bank
closures in 2011 comprising nearly 50 percent of the total nationwide.  However,
twenty-nine states had banks closed by regulators in 2011.

CALIFORNIA
All totaled, since the Great Recession began, regulators closed 38 financial
institutions in California, less than 10 percent of the nation’s total. According
to the FDIC in 2008 there were five banks closed by regulators in California as
compared to 25 in the nation.  The number of closures in the state grew to 17
compared to 140 nationally in 2009.  However by 2010, the number of closures in
the state began to drop off to 12 as compared to 157 in the nation.  As the year
comes to a close for 2011 the number of closures in the state continues to drop
with only 4 closures as compared to 90 closures nationally.  However, the damage
has been done.  California has the fourth highest rate for bank and thrift
closures in the nation.  However, of further significance, the closures comprise
$104.3 billion of the total assets of the failed institutions nationally and
comprise 25% or $19.8 billion to the losses of the FDIC Insurance Fund.

I am Tim Johnson and this has been the California Business Minute.