Amidst signs of global recovery, two more US banks went bankrupt last week, pushing total failures to a whopping 94 entities so far this year in the country.
With so many collapses in just nine months, the average number of banks falling apart each month stands at ten so far this year. Besides, a staggering 109 banks have folded up in the US since the collapse of the once-famed Wall Street firm Lehman Brothers last September. Two banking entities-Irwin Union Bank, FSB, Louisville, and Irwin Union Bank & Trust Company in Columbus, were shut down by the authorities on September 18. Federal Deposit Insurance Corporation (FDIC), which is often appointed as the caretaker of failed entities, would incur a total cost of about $2.5 billion. As per FDIC, Irwin Union Bank & Trust Company had total assets of $2.7 billion and deposits of about $2.1 billion as on August 31, 2009. Meanwhile, Irwin Union Bank had assets of $493 million and deposits of about $441 million. Of the 109 failures after the collapse of the Lehman Brothers, 15 took place last year. So far in September 2009, 10 banks have gone bankrupt. Banking failures, especially of small and medium ones, are rising on account of higher unemployment which has resulted in more defaults. Presenting a gloomy scenario, the FDIC has said the count of problem banks, which are at the risk of collapsing, have jumped to 416 in the second quarter of 2009. In August, a stunning 15 banks failed, while in July, the number peaked at 24, which was the maximum for any month in 2009. Seven banks went out of business on July 2 and July 24. Among the collapsed entities this year are the First Bank of Kansas, InBank, Vantus Bank, Platinum Community Bank and the First State Bank, First Coweta Bank, eBank and Community First Bank.
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