Written by Updated: December 2, 2011 VN:F [1.9.11_1134]please wait…Rating: 0.0/5 (0 votes cast)
The Face of Bank Failure in America
Bank failures have reached 87 for 2011. This number is rather low compared with previous years since the banking crisis began in 2008. The year 2010 saw 157 failures and 2009 saw 140. When you compare 2011 with prior years you could say that things are getting better. Though, 87 banks crashing in 11 months are not saying much.
Bank failure is being seen all over America. The dollar amount attached to the bank failures for this year alone equals $2000 for every man, woman and child in America.
Are bank failures becoming routine or are we becoming complacent? Not more than ten years ago a failed bank would be announced on the news as a newsworthy event. Though, we have had over 400 failed banks since 2008 many of these didn’t even warrant news worthy peeps. Just last week there were six different banks scattered throughout the states of Florida, Illinois, Kansas and Georgia that failed.
The FDIC or Federal Deposit Insurance Corporation covers each depositor’s monies in banks up to $250,000. The FDIC covered the depositor’s monies as well as taking over the business of the six failed banks. The largest failed bank was found in the state of Kansas, Hillcrest Bank. Hillcrest Bank had over $1.6 billion in assets at the time of failure.
Assets for the failed banks are defined as monies that are owed the bank by customers. For an example, a mortgage owed the banks would be considered an asset. When looking at the assets for the failed banks across the nation since 2008 the total assets are equal to $630 billion which equates to $2000 for each man woman and child in America.
When you view the country as a whole there is a different look to failed banks. Many ask which area or state has been hit the hardest by the banking crisis. Depending on how you look at it the view can certainly change. In states that have seen one bank failure versus another with ten or twenty, you view is definitely different.
According the FDIC failed bank records, going back to 1935; some states have fared better than others. Georgia happens to be the state with the worst record of failed banks with 46 since 2008. Atlanta is one of the state’s largest metropolitan areas and has more failed banks than other cities of the state combined. The state of Florida is not far behind with 43 for the same time period.
The southern United States has been hit hard by failed banks compared with other regions of the country. Outside of the southern United States the city of Chicago has an inordinately high number of bank failures.
Most of the failed banks that since the crisis began did not have a large number of assets and deposits that were even smaller. When you view the bank failure by the amount of total assets that each bank has outstanding compared with the population of each state, Nevada has the worst asset to population ratio for failures.
Since 2008, the state of Nevada had ten banks that failed. Though, the assets for the ten banks that did fail account for almost $200,000 in bad debt for every person represented in their population. Pennsylvania fares the best with $1 for every man, woman and child because they have only seen one bank failure with extremely low assets.
With 2010 appearing as the worst year since the banking crisis began in 2008 we may be on the mend for the banking crisis. We are still looking better than the recessions seen in the 1980s or even the 1990s for overall bank failures. Financial experts are mixed when asked if we are at the end of the bank failures for the current recession. Depending on where you are the face of bank failure can certainly look different.
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