BiggerPockets

As Foreclosures Continue and Unemployment Persists More Banks are Failing

Thursday, April 29

As foreclosures continue and unemployment persists more banks are failing. FDIC has downed shutters on four other banks – making the total of shut down to 54 bank failures in 2010.

Three banks have been taken over by the Federal Deposit Insurance Corporation in Chicago – New Century Bank (assets worth $485.6 million), Citizens Bank & Trust Company (assets worth $77.3 million) and Broadway Bank (assets worth $1.2 million). Amcore Bank of Rockford (assets worth $3.8 million) was also taken over.

The deposits of Broadway Bank as well as New Century Bank are to be taken over by MB Financial Bank. Citizen’s deposits would be taken over by the Republic Bank of Chicago while that of Amcore by Harris National Association of Chicago.

The collapses of Broadway Bank, Amcore Bank, New Century Bank, Citizens Bank & Trust Company would gnaw into the insurance fund of FDIC by $394.3 million, $220.3 Million, $125.3 million and $20.9 million respectively.

The family of Alexi Giannoulias (Illinois Treasurer) owns Broadway. He is running for the senate seat Obama had previously occupied. The bank was weighed down with bad housing loans and had suffered a loss of $75 million in 2009.

In 2009 140 banks had failed – it being the highest number since 1992 when the savings and loan crisis had been raging. This cost the insurance company over $30 billion. In 2008 there had been 25 bank failures and 3 in 2007. It is apprehended that the number will reach its height this year crossing the figure o 2009 said Sheila Bair the chairperson of FDIC.

Loans made on commercial estates have failed and this has caused further losses to FDIC counting to millions in dollars. Last year the corporation flashed red lights touching a deficit of $20.9 billion as on 31st December 2009.

The number of problematic bank in the confidential list of FDIC went up to 702 during the fourth quarter of 2009. In 2008 during this same period it was 552. In the first quarter of this year one out of every three banks have reported net losses. The corporation apprehends that the expenses pertaining to resolving the collapsed banks would increase to $100 billion during the forthcoming four years.

FDIC ruled in 2009 that the banks pre-pay nearly $45 billion as premiums for 2010 continuing up to 2012 to make up for the lost funds.

Comments

1. 

   Dale Osborn Reply
   almost 2 years ago

   With the greed of CEOs, you can see why banks continue to fail! They have more than enough money coming in - controlling money and real estate. It is really a shame they end up hurting the working people!

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