Bankruptcy & Closures: Six More Bank Failures Makes 125 in 2010

The banking devil is still heading down to Georgia, looking for bad bankers’ souls to steal.  The problem is that Georgia had just three of the six banks closed down on Friday.  “Just…”  Ohio, New Jersey and Wisconsin all got a bank closing each as well.

2010 has now seen 125 bank closures, with six in a single weekend marking one of the highest weekend tallies this year and setting 2010 to be a worse year for bank closings versus 2009.

This marks 14 of the 125 closings this year coming from Georgia.  The three Georgia banks taken over by the FDIC (the Federal Deposit Insurance Corporation) were Bank of Ellijay with $168.8 million in assets; First Commerce Community Bank with $248.2 million in assets; and Peoples Bank with $447.2 million in assets.  Community & Southern Bank of  Carrollton, Georgia has agreed to assume the assets and deposits of all three Georgia banks.  The banks and the FDIC also agreed to share a sharp $602.5 million in losses of the failed institutions via loans and the other assets.

Just like you would expect in an infomercial, “But wait, there’s more….”

• ISN Bank of Cherry Hill, N.J. failed with $81.6 million in assets and will be taken over by New Century Bank of Phoenixville, Pennsylvania. New Century operates as the holding company for Customers Bank, and it and the FDIC will share $64.8 million in losses on loans and other assets.
• Bramble Savings Bank in Milford, Ohio was shut down with some $47.5 million in assets.  Its takeover is by Foundation Bank of Cincinnati, Ohio.
• Maritime Savings Bank of West Allis, Wisconsin failed with assets right at $350.5 million, and it is being taken over by North Shore Bank of Brookfield, Wisconsin.

The six failures are expected to cost the FDIC $350 million. These six new bank closures and takeovers now puts 2010 as a year which will certainly overtake 2009 in bank closings as the middle of September is now at 125 for 2010 versus less than 100 bank closures at the same time in 2009.  There are still more than 3 months left for the FDIC to pass the 140 mark hit last year. In short, “only” (again, only) 1 bank closure per weekend would let 2010 eclipse 2009, and so far in 2010 the bank closures are averaging closer to three per Friday.

The full FDIC failure  list here shows that this was one of the worst weekends for bank closures of 2010.  Why are we so sure that closures will easily surpass 2009?  Simple enough.  The problem-banks list of the FDIC was up by 54 banks to 829 by the end Q2 versus Q1 of this year.  Bankers and their pace of weekend closures and the impact of poorly run banks hurting well run banks have joined Led Zeppelin and Godsmack in sing alongs… “Good Times, Bad Times.”

When bankers go bankrupt.

JON C. OGG