November 12, 2010 – The number of banking failures in 2010 has climbed past last year’s total of 140, which was the most since 1992. Three additional banking failures this week brings the year’s total to 146 as regulators closed banks in Georgia and Arizona.
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 in Georgia and Arizona had total assets of $1.0 billion and resulted in a loss to the FDIC Deposit Insurance Fund of $204.4 million.
- The week’s largest banking failure was Darby Bank & Trust, which had been in business for 83 years.
- The two failed Georgia banks were both purchased from the FDIC by Ameris Bank which still owes the US Treasury $47.5 million which was advanced to it under the Troubled Asset Relief Program (TARP).
- Failed Copper Star Bank of Arizona was acquired by Stearns Bank which has been aggressively buying failed banks. Stearns has now picked up six failed banks in various states.
Please click on the links below for detailed information on each bank closing.
Tifton Banking Company, Tifton, GA – Banking Failure #144
Darby Bank & Trust Co, Vidalia, GA – Banking Failure #145
Copper Star Bank, Scottsdale, AZ – Banking Failure #146