Banking regulators started off the new year by closing banks in Florida and Arizona, two of the States hit hardest by the real estate collapse.
During 2010 a total of 157 banking failures occurred, the most since 1992 when 181 banks were closed. In 2009 a total of 140 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 (see Seven Reasons Why Banking Failures Will Increase During 2011).
Highlights of this week’s banking failures include:
- This week’s two failed banks had combined assets of $749.1 million and resulted in a loss to the FDIC Deposit Insurance Fund of $105.9 million.
- The week’s largest banking failure was First Commercial Bank of Florida which had assets of $598.5 million.
- In what has become a routine event, one of this week’s failed banks was sold by the FDIC to a bank that has not repaid the US Treasury for money loaned to them under the Troubled Asset Relief Program (TARP).
Please click on the following links for detailed information on each bank closing.
First Commercial Bank of Florida, Orlando, FL – Banking Failure #1
Legacy Bank, Scottsdale, AZ – Banking Failure #2