How many loans must a bank have go bad, before it is washed to the sea?

Says here that 5% is the magic number and there are at least 150 banks with bad loans at that level or higher. The article says that all those banks report that they’re “well capitalized”. Go figure. While you’re figuring, anyone know Patriot Bank’s level?

UPDATE: Looks like Patriot is at 16%. That can’t be good.

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2 responses to “How many loans must a bank have go bad, before it is washed to the sea?

  1. shoeless

    The takeover of Colonial today will esentially wipe out the FDIC’s kitty. With Guaranty and Corus still to drop, Sheila Bair will have to go to Treasury to get some of those “emergency funds” which we were told would never really be needed.

    I’ll take the over on 15o banks. If M-T-M were required, it would show the entire banking system to be insolvent.

  2. HG

    “Non-accrual loans at June 30, 2009 were $119.9 million compared to $80.2 million at December 31, 2008.”

    “Total loans outstanding decreased by $75.3 million, or 9.4%, from $804.8 million at December 31, 2008 to $729.5 at June 30, 2009.”

    By my math, that is 16% of loans that are non-performing.