Source: The Economic Times

As many as 22 American banks have collapsed this year so far, even as the banking giant Citigroup, led by Indian-American, Vikram Pandit, struggled this week to save itself from becoming number 23 in this fast growing long list.

On Friday, three US banks collapsed with two of them being in California and the third one in Georgia.

The two California banks which were shut down Friday are Downey Savings and Loan of Newport Beach and PFF Bank and Trust of Pomona. The 12.78 billion Downey, The Wall Street Journal, said is the third largest bank to fall this year. Topping the list is $307 billion Washington Mutual.

In Georgia the Community Bank of Loganville closed down.

With little signs of improvement, The Wall Street Journal said regulators expect more failures during the remaining part of this year and next year, as “rotting real estates and other loans continue to weigh down bank balance sheets.”

The deposits and some of the assets of the two collapsed Californian banks were bought by US Bancorp, which now has emerged as one of the strongest US banks during the current financial turmoil. Deposits and assets of the Georgian bank was acquired by Bank of Essex from Virginia.

Among other banks, which collapsed this year – reflecting the deep trouble in which the US economy is in – include Franklin Bank (Houston), Security Pacific Bank (Los Angeles), Freedom Bank (Florida), Silver State Bank (Nevada), Columbian Bank and Trust (Kansas), First Priority Bank (Florida), First National Bank of Nevada, ANB Financial (Arkansas), IndyMac Bank (California).

The largest number of bank collapse has been reported from California.

Collapse of such a large number of American banks, despite a $700 billion bailout package reflects the deep turmoil of the US economy. From 2003 to 2007 only 10 US banks were reported to have collapsed. In 2008, the figure has already touched 22 and still more than a month to go.

Top Ten Bank Failures in U.S. History 

  • Washington Mutual of Henderson, Nevada and park City, Utah; seized September 25 with $307 billion in assets as of June 30
  • Continental Illinois of Chicago, collapsed in 1964 with $40 billion in assets
  • First Republic Bank Corporation of Dallas failed in 1988 with $32.5 billion in assets.Bank of New England collapsed in 1991 with assets of $21.7 billion
  • IndyMac Bank FSB of Pasadena, California, collapsed in July with assets of $32 billion
  • American Savings and Loan Association of Stockton, California, failed in 1988 with assets of $30.2 billion.
  • MCorp of Dallas failed in 1989 with assets of $15.6 billion.
  • Gibraltar Savings of Simi Valley, California, collapsed in 1989 with assets of $15.1 billion.
  • First City Bancorp of Houston failed in 1988 with assets of $13 billion.
  • Homefed Bank FA of San Diego failed in 1992 with assets of $12.2 billion.

Also the FDIC adds 54 more banks to its “problem list” on 11/25/08

The Federal Deposit Insurance Corp. said Tuesday the list of banks it considers to be in trouble shot up nearly 50 percent to 171 during the third quarter—yet another sign of escalating problems among the institutions controlling Americans’ deposits.

The 171 banks on the FDIC’s “problem list” encompass only about 2 percent of the nearly 8,500 FDIC-insured institutions. Still, the increase from 117 in the second quarter is sharp, and the current tally is the highest since late 1995.

“We’ve had profound problems in our financial markets that are taking a rising toll on the real economy,” said FDIC Chairman Sheila Bair in a statement, adding that Tuesday’s report “reflects these challenges.”

Banks across the country have been hurt—and in some cases, devastated—by the collapse of the subprime mortgage market and subsequent problems across the lending spectrum. As the FDIC report shows, the number of hobbled institutions is rising at a quickening pace, a trend that has already begun to reshape the banking industry.

     
Advertisements