Banks Suffer in 2009, Economic Recession still Critical

2009 was a difficult year with unemployment hitting a national high in March 2009. AIG, due to steamy waters, was bailed out by the Federal Reserve so as to prevent other banks from suffering bankruptcy. However despite this effort over 130 banks still went bankrupt this year including:

1. Colorado National Bank, Colorado Springs, CO: Closed on March 20, 2009, assets at close $132.5 million, deposits at close $82.7 million. Insured deposits were acquired by Herring Bank, Amarillo, Texas.

2. First Bank of Beverly Hills, Calabasas, CA: Closed on April 24, 2009, assets at close $1.5 billion, deposits at close $1 billion. FDIC will payout all insured deposi.

3. Independent Bankers’ Bank, Springfield, IL: Closed on December 18, 2009, assets at close $585.5 million, deposits at close $511.5 million. The FDIC created the Independent Bankers’ Bank Bridge Bank, National Association to take over the operation.

4.United Commercial Bank, San Francisco, CA: Closed on November 6, 2009, assets at close $11.2 million, deposits at close $7.5 million. Insured deposits were acquired by East West Bank, Pasadena, California.

5. United Security Bank, Sparta, GA: Closed on November 6, 2009, assets at close $157 million, deposits at close $150 million. Insured deposits were acquired by Ameris Bank, Moultrie, Georgia.

6. Home Federal Savings Bank, Detroit, MI: Closed on November 6, 2009, assets at close $14.9 million, deposits at close $12.8 million. Insured deposits were acquired by Liberty Bank and Trust Company, New Orleans, Louisiana.

The recovery to surviving banks depends heavily on how many people are willing take out loans from the bank and how much confidence is found within the banking system. Banks are more than willing to lend, but qualified borrowers are in short supply. Lending depends greatly on trust in the banking systems which has been lost due to the recession and the blame placed on banks. Without a mutual trust between borrowers and lenders only a slow national recovery can be foreseen.

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