140 Banks Closed; Will We Hit 150?
Goodness gracious! When this year began, I never thought that things would get quite this bad. I had predicted 130 banks would close, and we hit that number a couple of weeks ago. Today, that figure has hit 140 banks, and with 10 banks closed over the last couple of weeks, and two weeks to go for the year, could we hit that high number of 150 before the end of the year?
First, a couple of quick statistics, stuff I’d been wondering myself. One, this is the most number of banks closed in one year since 1992, when there were 181 banks closed. Two, we’re nowhere near the record, and now that I’ve seen this figure, I’m thinking that 416 banks that were in trouble earlier this year wasn’t as bad as it seemed at the time. The record is 534 banks closed, which happened in 1989 during the savings and loan crisis, when the FDIC‘s deposit insurance fund was actually running a negative balance. I guess that proves things really can get worse. Actually, it’s now in the red after today, which obviously isn’t good.
The big dog in today’s firefight was a bank that didn’t actually work with individual customers. Independent Bankers’ Bank, which had about 450 client banks in four U.S. states, was actually a bank for other banks. They took care of money transactions for smaller banks where those kinds of things might have been cost prohibitive. So, with this bank, the FDIC actually had to create its own organization to run these banks for awhile instead of finding someone else to take them over.
As for everyone in total, two banks were closed in Illinois, two in California, and one in Florida, Georgia, and Alabama. The Georgia bank, RockBridge Commercial Bank, didn’t have a buyer, so the FDIC will be doing the extraordinary move of sending everyone who was a depositor checks on Monday for what they had in the bank.
Now that’s scary.