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More than a dozen US banks go belly up in 2009

Thirteen American banks have collapsed so far this year - more than half the number of such failures in 2008...

Written by Press Trust Of India | New York | Published: February 16, 2009 12:52 am

Thirteen American banks have collapsed so far this year — more than half the number of such failures in 2008 — as the financial turbulence continues to rattle the world’s largest economy.

With four more banks going belly up last Friday,the total number of collapses in February stands at seven,which is the highest for any month since 2000.

A stunning 13 banks have been shut down by the authorities this year whereas just 25 such entities had collapsed in the whole of 2008.

Notably,the Federal Deposit Insurance Corporation (FDIC),which is often appointed as the receiver for failed banks,said four such entities were closed down on February 13. The latest ones to collapse are Pinnacle Bank of Oregon,Corn Belt Bank and Trust Company,Riverside Bank of the Gulf Coast and Sherman County Bank.

Earlier the highest number of failures took place in January,when six banks collapsed.

FDIC noted that Pinnacle Bank’s assets stood at 73 million dollars and had deposits of about 64 million dollars. Corn Belt Bank and Trust Company’s assets are worth nearly 271.8 million dollars and total deposits of 234.4 million dollars.

Riverside Bank had assets worth 539 million dollars and total deposits worth 424 million dollars. The figures are as on December 31,2008.

As of February 12,Sherman County Bank had total assets of about 129.8 million dollars and deposits of around 85.1 million dollars.

In 2008,25 banks were shut down by the authorities — an average of two entities going under each month. Most of the failures happened after the credit crisis turned severe with the bankruptcy of Lehman Brothers in September last year.

Prior to that,the largest number of bank failures took place in 2002,when 11 entities collapsed.

The most notable among the recent collapses is the failure of Washington Mutual,then the country’s largest savings and loan entity.

Better known as WaMu,the entity was closed on September 25 last year and it was later acquired by JPMorgan for nearly two billion dollars.

Other banks that went bust this year include County Bank,Alliance Bank,FirstBank Financial Services,National Bank of Commerce,Bank of Clark County,1st Centennial Bank,MagnetBank and Ocala NationalBank.

FDIC data also brings to light the fact that the number of commercial banks in the United States has come down by over 5,000 in the past 18 years.

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