Commercial Real Estate Blog

The FDIC issued a press release the other day discussing the number of banks on its “problems list”. According to the release, the number of problem banks grew from 90 at the end of the first quarter to 117. The amount of assets represented by these “problem banks” grew from $26B to $78B, with a big chunk of that change attributable to IndyMac.

A lot of people have been wondering when the banks will get their books in order. It makes sense to follow this metric as one of the measures and we’ll try to keep up with the number of banks on the FDIC “problem list” going forward.

IndyMac Bank (NYSE:IMB) was taken over by the FDIC today as it went under for being under-capitalized. The banks stock which went from $50 down back in 2006 ended at $.28 today. IndyMac is the largest thrift ever to go under in the United States, and the second largest bank to go under.

The FDIC will probably take a huge hit on it and then flip the bank out to an acquirer. Until they find a buyer though, the FDIC is running the show.

The failure comes after their June 30th announcement in which IndyMac said it was ceasing all commercial lending activity.

It is likely that this won’t be the last failure as market conditions continue to deteriorate in many markets. There is over $1T worth of ARM mortgages that will be coming due over the next year or so, and as those loans also turn into junk, more banks will feel the pressure to raise capital to prevent a fold-up.