I found this loss sharing video from the FDIC that I think does a pretty decent job explaining where all the assets go when a bank is shut down. After looking at a number of the Sale and Assumption agreements for some recent recent bank failures it seems pretty clear that the FDIC will absorb and dispose of some of the most troubled assets. I’m not clear, however, on how the assets that are acquired appear on the call reports of the acquiring bank. If any of our readers have insight into that let us know in the comments below.
Hope you find this video informative.