Ten US banks collapse each month; 107 since Sept `08

Last Updated: Sunday, September 13, 2009 - 12:04

New York: A staggering 107 banks have folded up in the US since the collapse of the once-famed Wall Street firm Lehman Brothers last September, with 92 entities of them failing in 2009.

The signs of economic revival notwithstanding, an average
of ten banks are going belly up every month so far this year.

Out of the 107 failures after the demise of the Lehman
Brothers, 15 took place last year.

So far in September 2009, eight banks have gone belly up
and the count of failures this year is more than three-fold
of just 25 collapses in 2008.

Three entities -- Corus Bank, Brickwell Community Bank
and Venture Bank -- were shut down by the authorities on
Friday.

The collapse of three banks would cost the Federal
Deposit Insurance Corporation (FDIC), which is often appointed
as the caretaker of failed entities, as much as USD 2 billion.
The failure of Corus Bank alone would cost USD 1.7 billion.

Last month, a staggering 15 banks shut down.

Banking failures, especially of small and medium ones,
are rising on account of higher unemployment which has
resulted in more defaults.

Presenting a gloomy scenario, the FDIC recently said the
count of problem banks, which are at the risk of collapsing,
have jumped to 416 in the second quarter of 2009.

Going by the FDIC data, Corus Bank`s assets and deposits
were worth USD 7 billion each as on June 30.

Meanwhile, as on July 24 Brickwell Community Bank had
assets to the tune of USD 72 million and deposits of USD 63
million.

Venture Bank had assets worth USD 970 million and
deposits stood at USD 903 million as on July 28.

In July, a staggering 24 entities failed- the maximum for
any month in 2009. Seven banks went out of business on July 2
and July 24.

The authorities closed down nine banks in June and seven
in May.

Official statistics show that institutions insured by
the FDIC charged off USD 48.9 billion in noncollectable loans
during the quarter, up from USD 26.4 billion a year earlier.

Among the collapsed entities this year are the First Bank
of Kansas, InBank, Vantus Bank, Platinum Community Bank and
the First State Bank, First Coweta Bank, eBank and Community
First Bank.

Bureau Report



First Published: Sunday, September 13, 2009 - 12:04

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