Number of Failed Bank in 2009 Tops 100

After a brief vacation over Columbus Day weekend, the rolling tally of failed banks is back again, making up for the lost time with 1 failure on October 16th and 7 this past Friday, October 23rd.  These latest failures, three of which were in Florida, bring the total number of banks failed since the beginning of 2009 to 105.

In addition to the Florida failures, banks also failed in California, Georgia, Minnesota, Wisconsin and Illinois. Georgia has had the most failures this year with 20, followed by Illinois with 17 and California with 10.

Below is a short list of the banks that have failed since October 16th. To view the complete list and an map of bank failures by state, visit our ongoing 2009 Failed Banks List page here.

October 16th

• San Joaquin Bank, Baskersfield, CA

October 23rd

• Partners Bank, Naples, FL

• American United Bank, Lawrenceville, GA

• Hillcrest Bank Florida, Naples, FL

• Flagship National Bank, Bradenton, FL

• Bank of Elmwood, Racine, WI

• Riverview Community Bank, Otsego, MN

• First DuPage Bank, Westmont, IL

Greatest Number of Failures in Over A Decade

This year marks the highest number of failed banks in a year since 1992, when the recession claimed 181 banks.  The FDIC has been selective in which banks it has closed, in part to stave off consumer panic that can come from a large number of banks, but also in order to try and prolong the life of many banks the some 416 banks that they have designated “troubled,” but may be able to stay in business if the economy continues to recover.  They also want to be as frugal with the use of the dwindling Deposit Insurance Fund (DIF), which the FDIC uses to cover the costs when a bank fails.

However, despite the large list of failures this past weekend, the pace of bank failures has actually slowed, with only 11 failures so far this month, as compared to the 24 that failed in July.  This is great news for the FDIC, which has shelled out an estimated $25 billion for bank failures so far this year, with an expected $75 billion in additional funding to be spent through 2013.  While the economic recovery remains slow due to a lack of consumer confidence in banks, and as buyers for failed institutions become harder and harder to find, the FDIC will have to dig deeper into the DIF and eventually even look to the US Treasury so that they can continue to guarantee that depositors money will remain insured.