69 US banks go belly up in 2009, 24 fail in July

[Robbien]

Source: Economic Times

NEW YORK: Bank failures in the US are increasing by the day, with an average of ten entities going belly up every month, taking the toll to 69 so far this year.

With five more banks collapsing on July 31, a staggering 24 entities were shut down last month, the highest for any month in 2009.

Moreover, the number of failures till the end of last month, 69, is more than double that of last year, 25.

. . .

The latest ones to collapse last Friday are First State of Altus, Integrity Bank, Peoples Community Bank, First Bankamericano and Mutual Bank, according to the Federal Deposit Insurance Corporation (FDIC), which is often appointed receiver of failed entities.

The failures of the five banks would cost the FDIC nearly USD 912 million.

Read more: http://economictimes.indiatimes.com/News/International-...

[lamp_shade]

1. For 20 years I lived in a busy Baltimore suburb. During the prosperous 90's, there must have

been a dozen "grand openings" of new banks within a 2 mile radius of me... all "local" banks with unfamiliar names... each replacing another bank that went belly-up. I often wondered how they stayed in business because they never looked busy and rarely advertised. These probably account for many of this year's failures.

[yy4me]

2. In our area there is always a new bank popping up on every

street corner. Some well known, others small or new to the area.

The banks have diluted their customer bast to the point that few in this area ger very busy in the course of the day. I live i a small town that has several banks but at a local shopping center about 2 miles away there are at least 10 banks. We are surrounded by small towns, all short driving distance from one another. I bet a conservative count would be 100 banks or branches.

To me this is overkill, especially since so many people now do business on-line. This post is meant to address the huge numbers of banks, not their business practices. I stopped dealing with a large bank that was expanding all over and moved my meager business to my very local and solvent bank.

Guess what, they know my name!

[FarCenter]

3. Commercial loans and brokered CDs

There are small banks that do most of their lending to small businesses, such as making construction loans to real estate developers. They may also get their deposits mainly through the brokered CD market, i.e. CDs sold to customers of the large brokerage houses.

These institutions often get into trouble when some loans go sour, either because they are too concentrated in lending to one type of borrower or industry, or they are lending on too favorable terms to golfing friends of the bank's owners.

[2Design]

4. Go with credit unions - get out of banks n/t

[Yuugal]

5. k&r nt

[TalkingDog]

6. In the South the joke is: A church and a bank.

In response to: What's on every corner in town?

I've always suggested it so the preachers don't have to carry all that tithing so far on Monday morning.

NC isn't having issues so far, but Charlotte is our buffer against the worst of it. When they start closing here, then there's trouble.