Florida bank brings failure count to 131

The fact that only one bank faltered last week is better than the week before, in which six closed, including AmTrust Bank in Ohio, the fourth-largest to drop this year. AmTrust had $12 billion in assets and $8 billion in deposits, and it cost the FDIC fund an estimated $2 billion.

This year's bank failure count is the worst since 1992, when we were at the peak of the savings and loan crisis. Last year, 25 banks failed, which far outpaced the three in 2007. The 2009 collapses have cost the FDIC fund more than $28 billion. Over the next four years, the total cost is expected to reach around $100 billion.

Any optimists who see this as some sort of "cleansing" that is coming to a close should brace themselves for some bad news: close to $500 billion in commercial real estate loans are expected to come due over the next few years. An economic hiccup could cause higher-risk loans to default, triggering more bank failures and higher costs for the FDIC. This is a concern for regional banks, which have high commercial real estate loan concentrations. Failed real estate development projects are causing developers to default on their loans.