Small bank failure

In the last three years 333 small banks have closed their doors and the Federal Deposit Insurance Corporation estimate that there are 860 "troubled" banks now. The FDIC insurance fund was $8 billion in the red at the end of September. It is the worse rate of bank failure since 1993, in the depths of the savings and loan disaster.
Badlands Journal editorial board
Washington Post
Regulators shut banks in Colo, NM, Okla, Wis…MARCY GORDON, The Associated Press
WASHINGTON -- Regulators on Friday closed banks in Colorado, New Mexico, Oklahoma and Wisconsin, lifting to 11 the number of bank failures in 2011 following last year's toll of 157 taken down by the weak economy and piles of soured loans.
The Federal Deposit Insurance Corp. took over the banks: First Community Bank, based in Taos, N.M, with $2.3 billion in assets; FirsTier Bank, based in Louisville, Colo., with $781.5 million in assets; First State Bank of Camargo, Okla., with $43.5 million in assets; and Evergreen State Bank, based in Stoughton, Wis., with $246.5 million in assets.
Minneapolis-based U.S. Bank agreed to assume the assets and deposits of First Community Bank. Bank 7, based in Oklahoma City, is acquiring the assets and deposits of First State Bank. McFarland State Bank of McFarland, Wis., is acquiring those of Evergreen State Bank. The FDIC was unable to find a buyer for FirsTier Bank, and it approved the payout of the bank's insured deposits.
The failure of First Community Bank is expected to cost the deposit insurance fund $260 million. The failure of FirsTier Bank is expected to cost $242.6 million; that of First State Bank, $20.1 million; and Evergreen State Bank, $22.8 million.
The 157 bank closures nationwide last year topped the 140 shuttered in 2009. It was the most in a year since the savings-and-loan crisis two decades ago.
The FDIC has said that 2010 likely will be the peak for bank failures. Already this year the pace of closures has slowed: By this time last year, regulators had closed 15 banks.
The 2009 failures cost the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were on average smaller. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three succumbed in 2007.
The growing number of bank failures has sapped billions of dollars out of the deposit insurance fund. It fell into the red in 2009, and its deficit stood at $8 billion as of Sept. 30.
The number of banks on the FDIC's confidential "problem" list rose to 860 in the third quarter of last year from 829 three months earlier. The 860 troubled banks is the highest number since 1993, during the savings-and-loan crisis.
The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.
Depositors' money - insured up to $250,000 per account - is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July.