The FDIC is Working on Memorial Day Weekend!?!

Only one bank failure to report this Friday.
The FDIC has been notorious the past 2 years for taking off the weeks of holidays, so even one failure is surprising for Memorial Day Weekend.  The zombie bank backlog must be reaching epic proportions for the feds to sacrifice their first holiday weekend of the summer!

The FDIC has closed First Heritage Bank of Snohomish, Washington.
At time of closing, First Heritage had $173.5 million in stated assets, and $163.3 million in deposits.

Columbia State Bank acquired First Heritage's assets, but insisted the FDIC enter a loss-share agreement for $142.2 million of the $173.5 million in stated assets.  This means that Columbia State Bank was not interested in 82% of First Heritage's assets unless the FDIC was willing to shell out for future losses on these assets.

This is getting unreal folks!

The FDIC estimates that the hit to the deposit insurance fund will be $34.9 million.  This means the FDIC only currently values First Heritage's assets as $128.4 million, rather than the $173.5 million stated by First Heritage.   Effectively, this means they overstated their assets by 35%.

For those counting, First Heritage is the 44th US bank to bite the dust in 2011.

Click here for the FDIC press release: