US bank collapse toll reaches 94 so far in 2009
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Last Updated: Monday, September 21, 2009, 20:20
New York: Two more US banks went belly up last week, pushing total failures to a whopping 94 entities so far this year in the country, even as the economy is showing signs of recovery.

As many as 94 bank collapse have been witnessed in just nine months, translating into an average of at least ten banks are going belly up every month so far this year.

Besides, a staggering 109 banks have folded up in the US since the collapse of the once-famed Wall Street firm Lehman Brothers last September.

Two banking entities---Irwin Union Bank, FSB, Louisville, and Irwin Union Bank and Trust Company in Columbus, were shut down by the authorities on September 18.

Federal Deposit Insurance Corporation (FDIC), which is often appointed as the caretaker of failed entities would incur a total cost of about USD 2.5 billion.

As per FDIC, Irwin Union Bank and Trust Company had total assets of USD 2.7 billion and deposits of about USD 2.1 billion as of August 31, 2009.

Meanwhile, as on August 31 Irwin Union Bank, FSB in Louisville had assets to the tune of USD 493 million and deposits of about USD 441 million.

Of the 109 failures after the demise of the Lehman Brothers, 15 took place last year. So far in September 2009, 10 banks have gone belly up.

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 has said the count of problem banks, which are at the risk of collapsing, have jumped to 416 in the second quarter of 2009.

In August, a stunning 15 banks failed, while in July, a staggering 24 entities failed, which was the maximum for any month in 2009. Seven banks went out of business on July 2 and July 24.

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: Monday, September 21, 2009, 20:20

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