Bank closings hit 100 for year; most since 1992
Filed under: Economy
Bank closings for the year hit 100 on Friday when regulators shut down Partners Bank in Florida. Financial institutions in the U.S. have collapsed under the weight of soured real estate loans and the Great Recession.The Federal Deposit Insurance Corp. took over Partners Bank, a small bank in Naples, with $68.7 million in assets and $63.4 million in deposits. Stonegate Bank, based in Fort Lauderdale, Florida, agreed to buy the deposits and assets of Partners Bank.
The 100 failures are the most in a year since 1992 at the height of the savings-and-loan crisis. They have cost the federal deposit insurance fund about $25 billion so far this year, and hundreds more bank failures are expected to raise the cost to around $100 billion through 2013.
| Recent US Bank Failures |
| Drag the map for more information on recent bank failures. Source: FDIC/DailyFinance |
Depositors' money is not in danger. The FDIC is backed by the government, and deposits are guaranteed up to $250,000 per account. But the deposit insurance fund has fallen into the red.
The 100 bank failures this year compare with 25 last year and three in 2007. It's the highest number in a year since 1992 during the savings-and-loan crisis, when 120 institutions collapsed. Closures peaked during that crisis in 1989, when 534 banks were shuttered.
The most severe financial crisis since the 1930s has hit banks large and small. With unemployment rising, consumer spending slack and businesses shuttered, experts say up to 400 more banks could fail in the next couple of years.
Banks have been especially hurt by failed real estate loans. Banks that had lent to seemingly solid businesses are suffering losses as buildings sit vacant. As development projects collapse, builders are defaulting on their loans.
The 100 failures may not fully reflect the depth of banks' travails. Many more banks - perhaps hundreds - are so weak they could have been shut down already, experts say. Many vulnerable banks are in limbo. Regulators have threatened to close them unless they shore up their balance sheets, but the recession has made it difficult to raise capital or sell assets.
The number of banks on the FDIC's confidential "problem list" jumped to 416 at the end of June from 305 in the first quarter. That's the most since June 1994. About 13 percent of banks on the list generally end up failing, according to the FDIC.
A new Obama administration plan unveiled this week would provide infusions of money to small banks at low interest rates, provided they agree to increase lending to small businesses. Financial institutions, including credit unions and banks, that serve low-income areas would get help at even lower rates to aid small businesses in the hardest-hit rural and urban areas.
The aid for the banks - the amount not specified by the administration - would come from money still available in the $700 billion financial bailout fund.
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Reader Comments (Page 1 of 2)
10-23-2009 @ 6:04PM
danzillo4 said...
I recall the Savings and Loan failure had some thing to do with the Bush boys..interesting to say the least, they were bail outs, interesting, there were regulations, interesting..sounds like savings and loans failures all over again as Yogi would say...It happened under Bush 41 now again under Bush 43, interesting..
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10-23-2009 @ 6:10PM
vaughnvdg said...
The S&L CRISIS and THE GREAT RECESSION BANK FAILURES should all be known in HISTORY as the BANKS WHO BELIEVED IN THE BUSHES!!!!
10-23-2009 @ 6:24PM
jack said...
Everyone is quick to blame a party, but you fail to see the big picture. This is not a Democrat problem, nor a Republican problem. It is Washington. Everyone, repeat, Everyone votes the same idiot back into office. This goes for the Republican and Democratic voters. Everyone believes what they're told out of Washington. They take from the Lobbiests, and do thier bidding. They say it takes 2 terms to accomplish what they said they would do, and then they ask for term limits to be removed.
WAKE UP, THEY ARE SCREWING US, AND WE ARE TO BLAME.
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10-23-2009 @ 7:27PM
steve said...
AMEN JACK AMEN ITS BOTH PARTIES
10-23-2009 @ 6:26PM
Kevin said...
10-23-2009 @ 6:04PM
danzillo4 said...
I recall the Savings and Loan failure had some thing to do with the Bush boys..interesting to say the least, they were bail outs, interesting, there were regulations, interesting..sounds like savings and loans failures all over again as Yogi would say...It happened under Bush 41 now again under Bush 43, interesting..>>>> 1992 would have been Clinton, President Bush Sr. was elected in 1992 but didn't start his term til 1993! The democrat liberals were, and are, out to destroy the US!
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10-24-2009 @ 8:10AM
jack said...
No, Bush Sr. was elected in 1988, and started his term in Jan. 1989.
Now for a little history lesson. The S&L crisis started in 1986, so this was not under Bush Sr. Reading makes you more aware.
The morgage crisis started under Clinton (notice both parties?), and progressed under "W".
As I have stated before, IT'S BOTH PARTIES!
10-23-2009 @ 6:32PM
Kevin said...
10-23-2009 @ 6:10PM
vaughnvdg said...
The S&L CRISIS and THE GREAT RECESSION BANK FAILURES should all be known in HISTORY as the BANKS WHO BELIEVED IN THE BUSHES!!!!>>>>The ones who said there were no problems were democrats. President Bush warned of the problem but the democrats said everything was fine!
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10-24-2009 @ 7:00AM
vaughnvdg said...
Then why did BUSH reapeatdly say THE FUNDAMENTALS OF THIS ECONOMY ARE STRONG right before the COLLAPSE in 2008?
10-23-2009 @ 7:05PM
DUKE said...
THINGS ARE GETTING BETTER. THERE ARE MORE JOBS. WE HAVE GREAT CHANGE . OUR DEFICIT IS SHRINKING. THAT'S WHAT THE PRESIDENT THINKS. WHERE IS OBAMA TODAY? OUT CAMPAIGNING, AND SPEAKING TO MIT STUDENTS WHILE THE COUNRTY BURNS. HE IS YOUR PRESIDENT. YOU VOTED FOR HIM.
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10-23-2009 @ 7:16PM
John said...
What's the matter all of you Obama fans? Things are still getting worse each day that goes by. The debt has tripled since Bush left office and more banks are going broke. I will give Obama this. Obama has brought change, big change and nothing but change.
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10-23-2009 @ 7:43PM
James said...
Obama? President Obama inherited this economic avalanche from 6 years of Republican dominated Senate and House and a Republican president named Bush.
Bush drove to National Deficit up to 10.5 Trillion Dollars....it now stands at 11.7 trillion. All this fallout is from the Bush Administration. The Down Jones fell from over 14,000 to 7,000 during the Bush administration. Obama has brought it back up to around 10,000.
Bush gave us two wars....and the Repukes want to keep on sending troops into Afganistan so they can come home in body bags. Time to end that hopeless war.
10-23-2009 @ 8:15PM
Fair Minded said...
James, your boy Mr O dim wit would have trouble running a lemonade stand. All he has done is to empty the Treasury to Big Business, and Big Banks, on the backs of working class Americans.
Mr dim wit has offered NOTHING to middle class American workers, NOTHING!! He is an empty suit.
3,000+ mom's and dad's, brother's and sister's, were murdered at work on 09/11. The Islamic rats bought this war to America, not George Bush. Freedom isn't free!
10-23-2009 @ 7:59PM
Willy said...
Hey, you have to give Mr O some credit. He did take us back from the "brink" you know. Yeah, right. Only another 400 banks to go under over the next 2 years? Not bad. It could have been 500 banks going under, so I guess things are getting better.
Oh, that's right, the national debt has tripled over the past 10 months. I guess Wall Street needed some more money to party with. I know I didn't get a dime of it.
Not to mention the multi-million dollar bonuses being paid with our tax money to the dead wood at AIG. Seems fair.
Not to mention the tax cheats like Charlie Rangel still in power. It was just an oversite.
Great to be an American in the 21st century! I'm glad our elected officials care about us. Keeping it a level playing field for all. I will sleep better tonight!
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10-23-2009 @ 8:09PM
Frank said...
You know, its hell getting old. I remember the height of the S&L crisis being about 1984, when inflation and the prime were both in double digits. The misery factor as Reagan put it. This may be the most failures since 1992, but 1992 was not the height of the S&L crsis.
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10-23-2009 @ 8:16PM
Bob said...
They need to put the brakes on Oil.
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10-23-2009 @ 8:20PM
Kevin said...
This is George Bushs' residue that's left-over. He really cared about America. Can you see how much ? Everything he touches turns to _ _ _ _.
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10-23-2009 @ 8:34PM
Frank said...
Maybe we should be blaming our business schools. Instead of teaching how to make money appear out of nowhere, they should have to take some extra courses in ethics. Look at the current crop of crooks, excuse me, CEO's; they were all about in business school in 1984 when the last round of scandals hit. They witnessed massive fraud and no one got punished. No lesson was learned. Today there are MBA's in our business schools watching our current crop of crooks, excuse me, CEO's, and no one is being punished. Using the law of extrapolation I can predict the next big financial scandal to hit in the year 2034, assuming of course that we are able to climb out of this disasater.
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10-23-2009 @ 8:57PM
hotrodqd said...
this was part of the design .....the little banks were killing the big banks so they with govts help set em up ......and slowly their competition disappears creating the huge conglomerates who corner the market (industry) ! you dont see the little fellas getting bailed out do ya ? all I know is somebody in america is responsible for 911 .....I also know who their leader is ......time will continue to expose the rest .......I'll pray for you.....cuz when the people find out .....its gonna suck to be you's !
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10-23-2009 @ 10:42PM
Gene H. said...
It doesn't matter if you're a CEO, LOBBYIST, or even the Bullcrap Senators.... they're all pulling the curtains over our eyes and they'll never tell you the truth as long as they get their way. For instance no COLA for seniors this year or maybe next also, They say that inflation is not high enough, but gas went up again these past 2 weeks and oil is again close to 75.00 a barrel and they want to have America to be self sufficient from foreign oil which in our lifetime will never happen...And to put the icing on the cake our politicians gave themselves a raise....Politics will always be the same except when their involved about something that they want passed...As far as the banking committee, they all said that they didn't see this crises coming, if you believe that, I have a piece of land on the south pole you can buy from me....I guess I said enough so far, let us all hope that it finally ends.
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10-23-2009 @ 11:50PM
Lanceaf said...
I love it... Obama supporters are SO NAIVE....
Obama promises:
1) cut deficit... Bush deficit in 2008.. 455 Billion... Obama deficit in 2009... 1.4 TRILLION... (Obama TRIPLED the deficit)
2) end war... Still going on...And, Obama may be sending more troops...
3) gay rights... Nothing done.. (Obama is anti-gay marriage, but the gay community supported him anyway)
4) Change Wall St.... tons of bailouts, and bonuses will exceed 2007..
5) non-partisan politics... Not even close...
6) Israel and Mid-East policy.. (Obama received 79% of Jewish vote, but he's appeased the Arabs and been critical of Israel)..
Obama had no track record and became senator...
Did nothing as an Illinois senator (I live in Chicago), and became president..
Hey, the country voted for a 'well-spoken' man.. So?
He's in WAY OVER HIS Head... He has no game plan..
Keep blaming Bush and clinging to that "hope" and "yes, we can" preaching...
As Nietzsche stated: "Hope is the worst of all evils, for it prolongs the torments of man"...
Let the democrats cling to hope.... The independents and GOP are preparing for disaster...
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