Last year there were more bank closures than there were in 2009, which was a horrible year. The last time I talked about bank closures, which was around the middle of February, there were 18 closures, and by the end of the month there were 23 for the first two months of the year.

Since that time it looks like things have slowed drastically down. Not including April, which had 13 closures, the number for the other 3 months not only never reached double digits, only one of those months, June, hit 5. Last year through April there were 64 bank closures already; this year through June there’s only 48.

What could be causing this reversal of fortune? Well, there are a few factors that could be contributing to it. One, the worst performing banks have already crashed and burned for the most part, even though some banks are still closing (so far 7 banks have been closed in July).

Two, many bad performing banks have either turned things around or have already merged with more successful banks. This would be significant since there had been predictions that as many as 700 banks were in trouble, including banks for whom the majority of their clients were commercial companies.

Three, many banks were able to turn things around by offering things to some of their customers that helped them sustain themselves and not fall. Large banks probably needed to do this as well, but I’ve seen that customer service isn’t always promoted as the best interest for large banks. Some smaller banks began offering free checking again and were working with people who they’d given home loans to rather than foreclosing on properties as often.

Is this a sign of an improving economy? Not necessarily, but it is definitely a sign of stabilization, and it’s more legitimate than the rise of the stock market.

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