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The bank failure rate slowed a bit last week, but the tally remains alarming. Two banks in Georgia and one in Florida hit the skids, bringing the 2010 total to 40.
The victims this time around were McIntosh Commercial Bank in Carrollton, Georgia, Unity National Bank in Cartersville, Georgia, and West Bank of Key West, Florida. Together the three bank failures are expected to cost the FDIC insurance fund approximately $213.6 million.
In 2009, bank failures hit a record 140, after 37 in 2008 and only three in 2007. The 2009 total was the highest since 1992. Bank-watchers do expect the failure rate to accelerate, though there are no full-year forecasts right now.
Also of concern is commercial real estate risk. Many community banks have high concentrations of these mortgages on their books, and a sudden turn could trigger a chain reaction.
Though this was a slow week relative to the prior two, keep in mind that bank failures last week only hit the same level attained in the entirety. The 40 reached this year, just as the fourth quarter is ending, is 43% higher than the 2008 total.
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