Newspaper article Sarasota Herald Tribune

FDIC's Estimates of Failures' Costs Prove to Be Inaccurate

Newspaper article Sarasota Herald Tribune

FDIC's Estimates of Failures' Costs Prove to Be Inaccurate

Article excerpt

SEVERAL OF FLORIDA'S BIGGEST bank failures have cost the Federal Deposit Insurance Corp. billions of dollars more than expected.

The FDIC estimates the cost of a failure when it shuts down a bank. The agency later revises that cost, up or down, as it sells off bad assets and incurs other expenses.

In all of 2012, bank failures cost the FDIC $241.6 million more than it initially projected, according to new research by analyst SNL Financial. The federal agency now pegs the cost of those 51 failures at $2.75 billion, or nearly 10 percent more than first estimated.

The FDIC appears to be doing a better job today of anticipating the cost of bank failures than it did a few years ago.

BankUnited FSB, the former Coral Gables-based bank that remains Florida's largest failure, was estimated to cost $4.9 billion when it failed in May 2009. The latest estimate is more than $5.9 billion.

Orion Bank of Naples, a big lender in Sarasota and Manatee counties during the real estate boom, was supposed to cost $615 million when it failed in November 2009. Its tab is now up to $868 million.

Colonial Bank of Alabama, a sizable player in Southwest Florida before going under in August 2009, was projected to cost $2.8 billion. The price tag has now hit $5.9 billion.

Superior Bank, another Alabama bank with local offices, failed in April 2011 at an estimated $260 million. That has since doubled to $531 million.

An Achieva achievement

The League of Southeastern Credit Unions named Achieva Credit Union its Credit Union of the Year in the $500- million-asset category.

Clearwater-based Achieva, which operates five Sarasota County offices, was honored day-to-day operations, financial prowess and community outreach.

The LGCU, which represents 285 credit unions in Florida and Alabama, evaluated nominees on such factors as financial strength and performance, services to members, new programs and education efforts.

Achieva has 102,000 members in nine counties and reported $1 billion in assets as of March 31. It earned $2.6 million in the first quarter of 2013 and $10.5 million in 2012.

It recently opened a branch on the campus of the Sarasota County Technical Institute, where students can intern to gain hands-on experience about business practices, marketing and financial skills. …

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