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The FDIC said this week that it expects distressed loans tied to mortgages and commercial real estate failures to result in many more bank failures this year. Last year 140 U.S. banks failed, the highest annual level since 1992. The FDIC has said the total bill for bank failures for the period of 2009 through 2013 could reach $100 billion.
Five more banks were seized by regulators on Friday, bringing this year's total to nine. The five failed banks are:
- Columbia River Bank of Oregon ($1.1 billion in assets, $1 billion in deposits)
- Charter Bank of Santa Fe, New Mexico ($1.2 billion in assets, $851.5 million in deposits)
- Evergreen Bank of Seattle ($488.5 million in assets, $439.4 million in deposits)
- Premier American Bank in Miami ($326 million in deposits)
- Bank of Leeton, Missouri (a single branch, $20.4 million in deposits)
All of these failed banks were taken over by other institutions. The FDIC estimated that the Friday closings would cost the its cash-strapped deposit-insurance fund $531.7 million, reported the Wall Street Journal (subscription required).
"While the economy is showing signs of improvement, recovery in the banking industry tends to lag behind other sectors. We expect to see the level of failures continue to be high during 2010," said the FDIC's Mitchell Glassman, director of the division of resolutions and receiverships. FDIC Chair Sheila Bair has forecast that failures will peak this year and then subside.
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Reader Comments (Page 1 of 1)
1-24-2010 @ 1:48PM
ij70 said...
No jobs, no recovery.
1-24-2010 @ 1:56PM
william lindblad said...
The prospect that failures will peak and than subside is little more than opinion and opinion without fact is worthless. The failures of commercial venture has been expected for more than a year and consequently, many banks that funded it. What is missing from the blog is that many large commercial real estate projects were also funded by private investment groups using their own capital. Sounds like "so what" if these people lose their shirts, but this could have far reaching ramifications. An example of this would be the private investment is in part or whole of a publicly traded company which could set off seismic activity on Wall St. in the event of a collapse.
This is one area where the government cannot intervene.
1-24-2010 @ 2:50PM
michael said...
would someone tell me where this recovery exist...until we allow the bad decisions to filter out, how are we supposed to know when to make any commitments at all...you put your chips on the table, there is no REWIND..please call a GROWN UP, this is ABSURD!!!!!!