Weekend Woe: Bank of Wyoming, We Hardly Knew Ye


Shed no tears for Bank of Wyoming. Bearing the cheery URL myfriendlybank.com and located in the hot springs town of Thermopolis (America's Adventure Spa) since 1978, Bank of Wyoming Friday became the 53rd bank to be liquidated this year by the Federal Deposit Insurance Corporation.

FDIC reports that as of June 30, the bank had "total assets of $70 million and total deposits of approximately $67 million." If those figures draw from the same database as this May 18 fact sheet from ibanknet.com, that means Somebody's Friendly Bank saw an outflow of about $13 million in deposits, along with a $24 million decline in measurable asset values, over a 43-day period.

Consider this, however: That fact sheet suggests (and as always, if you see me making an error, please correct me in the rudest possible manner) that Bank of Wyoming's balance sheet in May was in very bad shape but comparable, at a much smaller scale, to some of the Big 19 banks.* better than Wells Fargo's in December. Bank of Wyoming in May had $5 million in bank equity capital, which in the absence of a line item for cash I'm assuming translates into "cash and cash equivalents." With this fraction, Bank of Wyoming in May was servicing $94 million in total assets and $89 million in total liabilities. Wells Fargo in December had $23 billion in cash, with total assets of $1.3 trillion and total liabilities of $1.2 trillion.

It's jarring to see who is small enough to fail. Bank of Wyoming, the cached remnants of its site indicate, was a plain smalltime bank, offering NOW Accounts, "Carefree Checking," modest commercial and real estate loans (for "our ever growing and changing community") and similar vanilla products. This is not to get misty over a bank that mismanaged its business, and I'm sure it would be a hoot to find out what that item was that generated negative $190,000 in "non-interest income." (Really, what would that be in a pop. 3,200 town in the Equality State? Big stake in a water park maybe?) But is there an ethical defense for keeping Dick Kovacevich on his throne while letting Bank of Wyoming go under? (I know the practical argument is that the FDIC can't afford to liquidate a bank that big, though you could solve that one by giving $700 billion to the FDIC instead of giving it to the Office of Financial Stability.)

Calculated Risk does a nice Haiku from Soylent Green Is People whenever it makes a new bank failure announcement. If you're a Haiku fan, there you go.

* Updated: Please see discussion in comments, especially the comments from Amakaduri and Jonathan Green, whose input I greatly appreciate.