Problem list of troubled banks rise to 775

Posted: May 20, 2010 in Banks, Failures
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According to FDIC the number of troubled banks grew to 775, which is the highest level since 1992.

The fourth quarter of 2009, it stood at 702. The number of troubled banks continues to rise. Net income for the banks in the latest quarter was $18 billion. A year earlier it was $5.6 billion, so quite an improvement.

There still are a number of issues for banks to work through, and the recent volatility of Greece, the Euro, and the EU have demonstrated just how much sovereign debt can drag on a market whether it is in Europe or here in the US.

The FDIC deposit insurance fund however continues to operate in the red, with a deficit of $20.7 billion. Likely victims of the fund will most likely be smaller institutions. The FDIC expects U.S. bank failures to cost the fund $100 billion over the next 3 years. The agency mandated that banks prepay $45 billion in insurance premiums, for the next three years to help replenish the fund.

Delinquencies on commercial real estate loans continue to remain a source of trouble. More so for smaller to mid-sized banks. As expected by many analysts, a further decline in home prices will cause more losses for banks.

Three Midwest banks failed last week.

Bank Name

City

State

CERT #

Closing Date

Updated Date

Midwest Bank and Trust Company Elmwood Park IL 18117 May 14, 2010 May 17, 2010
Southwest Community Bank Springfield MO 34255 May 14, 2010 May 17, 2010
New Liberty Bank Plymouth MI 35586 May 14, 2010 May 17, 2010
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