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More bank closures

By Marcie Geffner · Bankrate.com
Wednesday, November 10, 2010
Posted: 9 am ET

143

That's the total number of U.S. banks that the Federal Deposit Insurance Corp. has sold off, wound up or closed so far this year.

The most recent additions to the list of failed banks, announced Nov. 5, were:

• K Bank (assets: $538 million) in Randallstown, Md.

• Pierce Commercial Bank ($221 million) Tacoma, Wash.

• Western Commercial Bank ($98.6 million) in Woodland Hills, Calif.

• First Vietnamese American Bank ($48 million) in Westminster, Calif.

One hundred forty-three may sound like a big number, and indeed it is. It's more than the total of banks that were closed in 2009 and nearly half the 300 or so that have died since the beginning of 2008. It's also roughly proportional, on average, to the more than 1,000 banks that were shuttered in the last economic recession from 1987 to 1992. That total, spread equally across those years for comparison's sake, works out to about 166 banks per year, not many more than have been recorded this year.

What's more, the comparison of recent years to the number of bank failures a decade ago is stark. In 2000, the FDIC closed only two banks. In 2001, the total was four banks. 2002? Eleven banks, or about one per month. 2003, three banks. 2004, four banks. Not until 2008 did the pace begin to pick up, reaching a rate of five banks that were closed in November of that year.

2010 is nearly at an end with just eight more Fridays to go, and two of those being holiday weekends. After that, we'll have a total count for the year.

Will next year be as ugly as this year has been?

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