130 Banks, And It’s Not Even Christmas Yet
We’ve finally hit the milestone that I predicted back in September. I said there would be 130 banks closed by the end of the year, and man, if I didn’t hit that with time to spare. It’s the highest number since 1992, and we’ve still got 3 full weeks to go.
On Friday, there were 6 banks closed to reach that number. The big dog this time around was AmTrust Bank in Cleveland, which is the fourth-largest U.S. bank to fail this year. AmTrust, one of the oldest banks in Cleveland after being founded in 1889, had $12 billion in assets, but was showing more than $1 billion in losses. The bank was seen as being so critical that politicians went to bat for its existence, giving it an extension that didn’t result in their overcoming their financial issues. It’s being taken over by New York Community Bancorp Inc., of Westbury, N.Y. These will be the first banks owned by the company outside of New York and New Jersey, as they’re taking over 66 branches.
Three of the banks that failed were in Georgia, which has had the highest number of banks close in 2009, 24: Tattnall Bank of Reidsville, First Security National Bank of Norcross, and Buckhead Community Bank of Atlanta. Other banks that failed were Benchmark Bank of Aurora, Ill., and Greater Atlantic Bank of Reston, Va. Combined, that’s $13.4 billion in assets and $9.4 billion in deposits. The FDIC estimates that the failures’ combined cost to the deposit-insurance fund would be about $2.4 billion, $2 billion of which is attributed to AmTrust.
Just three years ago Atlanta seemed like the city to go to; they can’t even get a mayor elected. How fast things can turn.