Seven more banks failed late Friday, including institutions in Illinois, Minnesota, Wisconsin, Georgia, and three in Florida. The FDIC posted the liabilities it would assume and which banks would take on customers from the shutter institutions in detail on its website.

According to MarketWatch, "CreditSights, which tracks the dismal data, predicts that in the current cycle, from 2008 through 2011, as many as 1,100 banks will fail. That would wipe out 13.4% of all U.S. banks, representing 7% of U.S. banking assets."

What a way to go into the holiday weekend, eh? On Thursday, seven banks were shut down by authorities, which pushed the total of failed banks for 2009 to 52 -- which more than doubles the number of bank failures in 2008. Six of the seven banks seized were located in Illinois and the other was in Texas, according to the Federal Deposit Insurance Corporation (FDIC).

According to the federal group, the Illinois failures are interlinked, as all six banks were controlled by one family and used a similar business model. The FDIC noted that this model "created concentrated exposure in each institution." This model left the banks heavily exposed to collateralized debt obligations and other loan losses. The six banks brings the total of failed banks in Illinois to 12.

As for the Texas bank failure, it was the first in the state this year.

Last March, I posted on whether we were at the beginning of the Greatest Depression. Back then, my reasoning was that there was $6.1 trillion in financial toxic waste -- in the form of Collateralized Debt Obligations (CDOs) -- in our financial system resting on a sliver, a mere $340 billion, in capital.

Therefore, a 6% decline in the value of that toxic waste would wipe out the bank capital. (I should have added in another $6 trillion in mortgage-backed securities). When you consider that Merrill Lynch sold $31.6 billion of its CDOs last year for 22 cents on the dollar, you realize that toxic waste needed an 80% haircut rather than a 3% one -- and voila -- you've wiped out all the capital!

If you look at some basic statistics comparing the current economic situation with that of the Great Depression, you might think that we are in relatively great shape. Our unemployment rate now is 7.2% -- at its nadir, 25% of the population was unemployed in the Great Depression.

The year 2008 saw a slew of discount M & A (mergers and acquisitions) deals, most of them below book value. Among these were Wachovia and National City. Capital One Financial bought Chevy Chase Bank at .64 times book value.

If you look at the financial landscape for 2009, some names are already popping up for distressed sales, such as Citizens Republic Bancorp (NASDAQ:CRBC), Huntington Bancorp (NASDAQ:HBAN), Midwest South Financial (NASDAQ:TSFG) and Colonial Banc Group (NYSE:CNB).

It seems that we will see a continuation of the purging of bad bank assets in 2009. Banks use a practice of good/bad assets and move their worst assets to a separate company that absorbs the assets' future losses. Then the original bank emerges as a healthier, deleveraged institution.

All of this is taking place under the radar and it is difficult for investors and the public to know which banks are using this practice. When deleveraging becomes unmanageable, the federal government may need to step in and absorb a bank losses to avoid the bank's failure.

Do you believe the financials are a place to invest in 2009?

The FDIC took over two more banks yesterday -- Haven Trust Bank of Duluth, Ga., and Sanderson State Bank -- bringing the total number of bank failures so far this year to 25. As I posted, the FDIC likes to close banks on Friday after hours so they can reopen as branches of the acquiring bank on the following Monday morning. (Here's a post on last week's bank failure.)

BB&T (NYSE: BBT) will buy $55 million of Haven's $572 million in assets and pay $112,000 for its $515 million in deposits. The FDIC will retain Haven's remaining assets "for later disposition" -- paying $200 million. Pecos County State Bank of Fort Stockton, Tex., will buy $3.8 million of $37 million in Sanderson's assets and pay a premium of 0.55% to assume its $27.9 million in deposits -- costing the FDIC $12.5 million.

This week's bank failures were small potatoes for the FDIC which plans to double the insurance premiums it charges banks to cover these failures. With industry earnings down 94% to $1.73 billion from a year ago, the FDIC expects things to get worse -- yielding bank failures through 2013 that will cost it almost $40 billion.

And guess who will pay those higher premiums? You and me.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

The FDIC took over another bank yesterday -- First Georgia Community Bank -- bringing the total number of bank failures so far this year to 23. As I posted, the FDIC likes to close banks on Friday after hours so they can reopen as branches of the acquiring bank on the following Monday morning. (Here's a post on the previous three bank failures.)

The FDIC is receiver of Jackson, Ga.-based First Georgia, which had $237.5 million in assets and $197.4 million in deposits as of November 7. United Bank of Zebulon, Ga., will take over First Georgia's deposits, reopen Its four branches, and buy about $60.6 million of First Georgia's assets. The FDIC will retain the other $176.9 million worth of assets and try to sell them.

More banks will fail. The FDIC estimates that through 2013 there will be about $40 billion in losses to the deposit insurance fund. Since its current $34.6 billion fund is below the minimum target level set by Congress, the FDIC is raising insurance premiums paid by banks and thrifts to replenish its fund. Meanwhile the number of troubled banks on the FDIC's list spiked 50% to 171 as of September 30.

Looks like First Georgia won't be the last to fail.

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He and has no financial interest in the securities mentioned.

The FDIC took over three banks yesterday, bringing the total number of bank failures so far this year to 22. As I posted, the FDIC likes to close banks on Friday after hours so they can reopen as branches of the acquiring bank on the following Monday morning. But the U.S. better be working overtime this weekend because Citigroup (NYSE: C) is going to need a merger partner or a government rescue to keep it from becoming history's biggest bank failure.

Of the three banks that failed Friday, two were in California -- Downey Savings and Loan Association (with $12.8 billion in assets and deposits of $9.7 billion), based in Newport Beach, and PFF Bank & Trust of Pomona (with assets of $3.7 billion and $2.4 billion in deposits) -- and the third was in Georgia: The Community Bank, with $681 million in assets and $611.4 million in deposits in Loganville.

In each case, the FDIC arranged for a healthier bank to take over the deposits, branches, and some of the assets of the failed one. U.S. Bancorp (NYSE: USB) acquired the deposits of the two California banks that were brought down by Option ARM mortgages -- which allow a borrower to skip payments and add the amount to the loan principle -- and housing construction loans. Bank of Essex, of Tappahannock, Va., bought all the bank deposits and $84.4 million of The Community Bank's assets -- the FDIC took on the rest.

One of the largest concerns about the economic downturn is that hundreds of banks might fail, putting stress on the resources of the FDIC. Yesterday, regulators shut Columbian Bank of Topeka, Kan. But, it is a small bank and the effects of the action should have almost no impact on the local economy.

According to the Associated Press, "It was the ninth failure this year of an FDIC-insured bank." Not many experts would have predicted that only nine banks would be gone as the calendar approaches labor day. Some analysts predicted that a thousand banks could go under. This group is lead by famous NYU economist Nouriel Roubini. Roubini expects total mortgage-related write-offs to hit $1.5 trillion.

While the predictions may be dire, where are the bank failures? There is no indication from the FDIC or any other federal government agency that the rate at which banks are going under will accelerate between now and the end of the year.

If there are supposed to be scores of more bank failures, the pace better pick up before the recession is over. The pessimists appear to have missed the mark.

Douglas A. McIntyre is an editor at 247wallst.com.

The Washington Post reports that the number of bank failures has been surprisingly low. But the crunch count is likely to grow as the problem bank list triples from 90 to 300 over the next three years. Meanwhile, the Federal Deposit Insurance Corporation (FDIC) could run out of money to pay off depositors of future failed banks unless it raises its deposit insurance rates from their current 5.4 cents per $100 deposits.

But the most interesting question is whether the White House is propping up banks that should fail so that it can push the biggest part of the cleanup into the lap of the next President. It is certainly bringing out all the biggest economic guns to delay the inevitable reckoning from the $8 trillion credit collapse. It spent $29 billion bailing out Bear Stearns, sent $160 billion worth of checks to taxpayers, cut interest rates from 5.25% to 2%, and seems belatedly to be enforcing regulations against manipulation of oil trading.

The Post quotes industry experts who think that the FDIC is propping up many banks. For instance, Bert Ely of Ely & Co., a bank consulting firm in Alexandria, VA, told the Post, "They are dragging their feet in forcing these banks to reserve realistically. Some of these banks could have been closed two or three quarters earlier." And Ken Thomas, a lecturer in finance at the Wharton School at the University of Pennsylvania, told the Post that the FDIC's foot dragging would only cost taxpayers more in the long run. Thomas said, "In some of these cases, I believe regulators should act sooner than later to prevent future losses to the fund."

IndyMac Bancorp.'s failure, along with the failure of seven other banks this year, has erased 17% from an FDIC insurance fund, and will likely propel an increase in insurance fund premiums, Bloomberg News reported Monday.

IndyMac may cost the fund $4-8 billion, in addition to $1.16 billion in earlier bank foreclosure costs, Bloomberg News reported Monday. Premiums for the deposit insurance fund are likely to rise, an FDIC official said.

Economist Peter Dawson said Monday a premium increase would represent the most prudent course for the FDIC.

"Needless to say, given the bank failures, this doesn't come as a surprise or a shock. The FDIC could have explored other funding options, but given the scope of the insurance funds claims, a premium increase would make the most sense at this time," Dawson said.

The FDIC is required to replenish the fund when the reserve ratio, or the balance divided by insured deposits, slips below 1.15%, Dawson said.

I've always been a fan of another week coming to an end -- marking Friday's showing with a salutatory TGIF. It's a day that most Americans spend getting comfy for the weekend, hitting a club, taking a road trip, etc. But before you rush to the ATM to withdraw cash for your weekend rendezvous, you might want to pay close attention to whether your bank will still be in business by Monday morning.

Nearly 10 banks have failed so far this year and as financial institutions struggle with billions of dollars worth of sour mortgage portfolios, you can best believe that more failures will soon follow. And after analyzing recent collapses, a pattern seems to be developing.

Recent Bank Closures:

• IndyMac Bancorp., seized on July 11 -- a Friday.
• 1st National Bank of Nevada and First Heritage Bank, both seized on July 25 -- another Friday
• And on Aug. 1, First Priority Bank of Bradenton, Fla., seized on -- you guessed it -- a Friday.

Is it just a coincidence or are bank regulators being slick about shutting them down after the close of business Friday when the public is less likely to be watching? I've wondered about this fact and have seen others express the same concern on message boards. Or how about trying to to avoid a panic, which led to the run on IndyMac?

Whatever your pick, be forewarned. Mind your assets -- it's OK to be fashionably late for the party. Cheers!

FDIC Chairman Sheila Bair has been sounding alarm bells for more than a year about the hazards for banks as foreclosures increase. Now, her worst dreams may soon be reality. This morning, the FDIC released its year-end numbers and the number of "problem" institutions jumped to 76 at the end of 2007, up from 45 a year earlier -- a 69% increase. At the end of the third quarter that number was 65.

As a result, the FDIC is staffing up. The Wall Street Journal reported that the FDIC is looking to bring back 25 retirees from its division of resolutions and receiverships. At the height of the savings and loans crisis in 1993, there were 572 "problem" institutions, and back then the FDIC had more than three times the number of employees it has today. So the FDIC needs to hire some new folks who can quickly get up to speed in the process of dealing with bank failures. More than 90 duty locations are listed for R&R [Resolutions and Receiverships] Specialists, but the announcement specifically indicates that the FDIC plans to rehire 25 retirees. If you've got the experience the pay is great: $67,836 to $180,770.

Employees hired according to the job listing will "engage primarily in resolution and receivership activities of financial institutions. They will be responsible for gathering, compiling, researching and manipulating financial data to prepare a variety of financial documents, management reports and presentations." They must be able to "analyze financial statements, operating and project reports, cost data, managerial practices, capital and reserves, credit condition, loan file documentation, cash flows and other elements to determine the soundness of the assets held by an insured institution and determine the risks and value of the assets and liabilities." FDIC obviously wants to hire quickly. The job listing opened on 2/20/2008 and closes on 2/28/2008.