U.S. regulators on Friday shuttered eight more banks in Florida, California, Massachusetts, Michigan and Washington, pushing up U.S. bank failures to 50 so far in 2010. This compares to a total number of bank failures of 140 in 2009, 25 in 2008 and only 3 in 2007.
Although the economy is showing signs of a gradual recovery with large financial institutions stabilizing, tumbling home prices, soaring loan defaults and rising unemployment continue to take their toll on small banks.
While we expect economic recovery to gain momentum soon, there remain lingering concerns in the banking industry. Failure of both residential and commercial real estate loans as a result of the credit crisis has primarily hurt banks. As the industry tolerates bad loans made during the credit explosion, the trouble in the banking system goes even deeper, increasing the possibility of more bank failures.
The failed banks are:
Sterling Heights, Michigan-based Lakeside Community Bank with $53 million in total assets and $52.3 million in total deposits.
Clermont, Florida-based AmericanFirst Bank with assets of $90.5 million and deposits of $81.9 million.
Palatka, North Florida-based First Federal Bank with $393.3 million in total assets and $324.2 million in total deposits.
Fort Pierce, Florida-based Riverside National Bank with assets of $3.42 billion and deposits of $2.76 billion.
Lowell, Massachusetts-based Butler Bank with $268 million in assets and $233.2 million in deposits.
Oakland, California-based Innovative Bank with assets of $268.9 million and deposits of $225.2 million.
San Rafael, California-based Tamalpais Bank with total assets of $628.9 million and deposits of $487.6 million.
Lynnwood, Washington-based City Bank with $1.13 billion in total assets and $1.02 billion in total deposits.
These bank failures will deal another blow to the Federal Deposit Insurance Corporation's (FDIC) fund meant for protecting customer accounts, as it has been appointed receiver for these banks.
When a bank fails, FDIC reimburses customers for their deposits of up to $250,000 per account.