November 19, 2010 – Three additional banking failures this week brings the year’s total to 149 as regulators closed banks in Wisconsin, Pennsylvania and Florida.
In 2009 a total of 140 banks were closed. This year has now seen the largest number of bank failures since 1992 when 181 banks were closed. During all of 2008 there were 25 bank failures. There were only 3 bank failures during 2007. No banks failed during 2005 and 2006.
With over 10% of all FDIC insured institutions on the Problem Bank List, the pace of banking failures does not look likely to subside anytime soon.
As of the latest report released by the FDIC there were 829 problem banks at June 30, 2010 up from 775 at March 31. Total assets held by the troubled institutions is $403.0 billion, a slight decrease from $431 billion in the previous quarter.
Making the problem even worse, the FDIC Deposit Insurance Fund has been completely depleted and now has a negative fund balance of $15.2 billion at June 30, 2010. The depleted FDIC insurance fund provides insurance protection for over $5 trillion in banking deposits. In the event of additional unexpected banking failures, the FDIC would quickly be forced to draw down on their $100 billion line of credit with the US Treasury.
Highlights of this week’s banking failures include:
- This week’s three failed banks had total assets of $969.3 million and resulted in a loss to the FDIC Deposit Insurance Fund of $199.5 million.
- The week’s largest banking failure was 90 year old First Banking Center of Burlington, WI, which had assets of $750 million.
- In what has become a routine event, two of this week’s failed banks were sold by the FDIC to banks that have not repaid the US Treasury for monies given to them under the Troubled Asset Relief Program (TARP).
Please click on the following links for detailed information on each bank closing.
Gulf State Community Bank, FL – Banking Failure #147
Allegiance Bank of North America, PA – Banking Failure #148
First Banking Center, WI – Banking Failure #149