Econintersect: The total bank closures so far this year now stands a 68. Three banks were closed Friday August 19 and a fouth was closed in a rare Thursday action by the FDIC. Many of the banks closed this year have been smaller institutions with assets and deposits well under $1 billion. This week one of the banks closed was Lydian Private Bank in Palm Beach, Florida, with assets of $1.70 billion and deposits of $1.24 billion.The Thursday closing was tiny Public Savings Bank of Huntingdon Valley, Pa. The bank was closed on Thursday to avoid violation of the Jewish Sabbath Friday evening, according to the Wall Street Journal. Public Savings had only $45.8 million in assets and $46.8 million in deposits. The WSJ said that the closure was expected to cost the FDIC insurance fund approximately $11 million.
From the WSJ:
The pace of closures has slowed as the economy has improved and banks work their way through the bad debt stemming from the recession and financial crisis. By this time last year, regulators had closed 118 banks.
In all of 2010, regulators seized 157 banks, the most in any year since the savings-and-loan crisis two decades ago. Those failures cost around $21 billion. The FDIC has said 2010 likely marked the peak for bank failures from the wave.
In 2009, there were 140 bank failures that cost the insurance fund about $36 billion, a higher price tag than in 2010 because the banks involved were bigger on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.
From 2008 through 2010, bank failures cost the fund $76.8 billion. The deposit insurance fund fell into the red in 2009. With failures slowing, the FDIC’s deficit narrowed in the first quarter of this year; it stood at about $1 billion as of March 31.
The following graphs summarize the bank closure data for the financial crisis years (from The Big Picture):
The summary for the week as posted in the weekly review GEI Analysis article by Steven Hansen:
Sources: Reuters, GEI Analysis, The Big Picture and Wall Street Journal
