This Week's Busted Banks

Only one this week: Georgia's Freedom Bank.

State bank regulators closed Freedom Bank of Georgia Friday, making it the 17th bank to fail this year.

The announcement marks the eighth consecutive week that a bank failure has been reported after the stock market's closing bell on a Friday.

The failed bank, based in Commerce, Ga., had $173 million in assets and $161 million in deposits as of March 4, 2009, according to the Federal Deposit Insurance Corp.

The FDIC estimates the bank failure will cost its fund approximately $36.2 million.

Northeast Georgia Bank of Lavonia, Ga., agreed to assume all of the failed bank deposits, and buy about $167 million in assets, which it valued as worth $13.65 million less than their face value. The FDIC will retain the remaining assets.

The new bank and the FDIC have agreed to split the losses on $96.5 million in assets as part of a loss-share transaction

With the FDIC asking for up to $500 billion more this week in order to deal with banks like this across the country, it's clear Sheila Bair is expecting a massive number of failed banks to swamp the country in 2009...or just several very large banks to fail.

To me, this seems to be a dead giveaway that Plan N is now in active mode and once this bipartisan bill passes with open support from both sides, Plan N will be on, and the FDIC will be on the front lines. Planning for the FDIC needing half a trillion dollars to specifically handle bank failures? That's not something you do lightly.

Clearly, the Obama administration, Congress, and the FDIC are all expecting that money to be used. The practical upshot is that we're just getting into the era of massive bank failures in 2009.