FDIC risks $80 Billion in Loss Share Agreements

Every Friday, in just about every bank failure press release, the FDIC mentions a loss share agreement with the acquiring bank. As an example, in the press release regarding Mutual Bank of Harvey, Illinois on July 31st:

As of July 16, 2009, Mutual Bank had total assets of $1.6 billion and total deposits of approximately $1.6 billion. In addition to assuming all of the deposits of the failed bank, United Central Bank agreed to purchase essentially all of the assets.
The FDIC and United Central Bank entered into a loss-share transaction on approximately $1.3 billion of Mutual Bank's assets.
emphasis added

For those interested in every detail, here are the Single Family Loss Share Agreement (page 54) and Commercial Loss Share Agreement {page 89) between the FDIC and United Central Bank (the acquirer).

Calculated Risk: FDIC risks $80 Billion in Loss Share Agreements

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