With the financial meltdown continuing unabated,US has already seen the collapse of 16 banks in the last two months which is more than one-fourth the total number of failures in the last nine years.
With ten bank collapses in February,a total of 68 banks have failed since 2000 in the US.
Moreover,16 bank failures this year is more than half of the total collapses in 2008. Last year,a whopping 25 banks went belly up,mainly after the financial crisis turned severe with the bankruptcy of Lehman Brothers in September.
According to the Federal Deposit Insurance Corporation,which is often appointed as the receiver for failed banks,two more entities were closed down on February 27.
With the collapse of Security Savings Bank,Henderson and Heritage Community Bank,Glenwood,the figure has touched 16 so far this year. In January,just six banks had failed.
In addition,the failure of ten banks in February,is the highest for any month in the last nine years.
As on December 5,2008,Heritage Community Bank had assets worth 232.9 million dollars and deposits to the tune of 218.6 million dollars. On the other hand,Security Savings Bank had assets of about 238.3 million dollars and deposits of 175.2 million dollars,as on December 31.
In yet another sign of the deteriorating financial conditions,commercial banks and savings institutions insured by the FDIC reported a net loss of 26.2 billion dollars in the fourth quarter of 2008.
It is also the first ever quarterly loss since 1990. Prior to February this year,the largest number of bank failures took place in 2002,when 11 entities went belly up.
Four banks were closed down on February 13 alone. The failed entities on that day were Pinnacle Bank of Oregon,Corn Belt Bank and Trust Company,Riverside Bank of the Gulf Coast and Sherman County Bank. Other entities that collapsed this year include Silver Falls Bank,Alliance Bank,National Bank of Commerce,1st Centennial Bank and Magnet Bank.
Despite various initiatives by the Barack Obama administration including the mammoth 787-billion dollar stimulus package,the nations financial system continues to be on tenterhooks.
Last week,the Federal government stepped into bolster the balance sheet of Citigroup,a third such effort in the last five months.
In the last nine years,there were no bank failures in 2005 and 2006. Among the bank failures in 2008,the most notable was the folding up of Washington Mutual,then the country’s largest savings and loan entity.