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Charlotte, North Carolina - Regulators on Friday shut down three more banks, boosting the number of failures this year to 28 - more bank closures than in all of last year.
The latest banks seized were American Southern Bank in Georgia, Michigan Heritage Bank, and First Bank of Beverly Hills in California.
The Federal Deposit Insurance Corp. will continue to insure deposits at both American Southern Bank and Michigan Heritage Bank. The FDIC will payout the insured deposits of First Bank of Beverly Hills. Regular deposit accounts are insured up to $250 000.
The Georgia Department of Banking and Finance took over American Southern Bank, based in Kennesaw, Georgia, while the Michigan Office of Financial and Insurance Regulation took control of Michigan Heritage Bank, based in Farmington Hills, Michigan. First Bank of Beverly Hills, based in Calabasas, California, was closed by the California Department of Financial Institutions. The FDIC was appointed receiver of all three banks.
The list of bank failures is growing as falling home prices and rising unemployment cause more individuals and businesses to default on their debt.
The failures have sapped billions from the deposit insurance fund. It now stands at its lowest level in nearly a quarter-century, $18.9bn as of December 31, compared with $52.4bn at the end of 2007.
The FDIC expects that bank failures will cost the insurance fund around $65bn through 2013.
The 28 bank collapses this year follow 25 failures in 2008, which included two of the biggest savings and loans, Washington Mutual and IndyMac Bank. Last year's total was more than in the previous five years combined and up from only three failures in 2007.
The FDIC had 252 banks and thrifts on its list of troubled institutions at the end of 2008, up from 171 in the third quarter.
- AP
