WASHINGTON (AP) – Regulators on Friday shut down banks in Florida, Georgia and Michigan, a total of five closures that lifted the number of US bank failures this year to 39. By this time last year, regulators had closed 64 banks.
The Federal Deposit Insurance Corp. seized: First National Bank of Central Florida, based in Winter Park, Florida, with $352 million in assets; Cortez Community Bank of Brooksville, Florida, with $70.9 million in assets; First Choice Community Bank of Dallas, Georgia, with $308.5 million in assets; Park Avenue Bank, based in Valdosta, Georgia, with $953.3 million in assets; and Community Central Bank in Mount Clemens, Michigan, with $476.3 million in assets.
Florida and Georgia have been the hardest-hit states for bank failures.
Twenty-nine banks were shuttered in Florida last year and 16 in Georgia. The four shutdowns in those states on Friday brought to four and 10 the number of bank failures in Florida and Georgia, respectively this year.
California and Illinois also have seen large numbers of bank failures.
In 2010, authorities seized 157 banks that succumbed to mounting soured loans and the hobbled economy. It was the most in a year since the savings-and-loan crisis two decades ago.
The FDIC has said that 2010 likely would mark the peak for bank failures.
There were 140 bank failures in 2009, costing the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were smaller on average.
Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.
From 2008, the year the financial crisis struck, through 2010, bank failures cost the fund $76.8 billion.
The deposit insurance fund fell into the red in 2009, and its deficit stood at $7.4 billion as of Dec. 31.
The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.
Depositors’ money – insured up to $250,000 per account – is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July.
The number of banks on the FDIC’s confidential “problem” list rose to 884 in the final quarter of last year from 860 three months earlier.
The 884 troubled banks is the highest number since 1993, during the savings-and-loan crisis.