Failed Banks

If you’ve got a lot of money and some "know how," you should be able to purchase a failed bank's assets from the FDIC, or even a failing bank before it goes under. If you only have a little bit to invest, you generally should look elsewhere. Now, though, that may be changing. 

Another Georgia bank has failed. The Mountain Heritage Bank of Clayton, Georgia, was closed Friday by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation as receiver. 

Bank profits rose in the fourth quarter of 2010 and for the year, as we just reported. But it turns out that not everything is rosy.

Friday is typically the day the FDIC acts to close failing banks, and last Friday was the final Friday of the first month of 2011. We thought it timely today, therefore, to see what’s what so far this year.

Last Friday, six more banks failed, bringing the total of FDIC-insured institutions to fail this year to 157. The 157th failure was Community National Bank, of Lino Lakes, Minnesota. 

Earthstar Bank, of Southampton, Pennsylvania, was closed on Friday. It is the 151^st U.S. bank to fail this year.

Last Friday saw the 149^th failed bank this year. Today, the FDIC reports that the number of institutions on its "Problem List" is up from 829 to 860 – the highest since March 31, 1993, when there were 928. The information is contained in the FDIC's third quarter report.

This is a bit of eye opening news on a late Friday afternoon in October: the Federal Deposit Insurance Corporation apparently is planning to sue bank executives at failed banks. 

Read more at http://www.washingtonpost.com/wp-dyn/content/article/2010/10/08/AR2010100802995.html.  

On Monday we noted that three corporate credit unions - Southwest Corporate Federal Credit Union, Members United Corporate Federal Credit Union and Constitution Corporate Federal Credit Union - had been closed and placed into conservatorship by the National Credit Union Administration at the end of last week. We now know who the NCUA has put in place to oversee these credit unions’ remaining operations. 

On Friday, federal regulators closed two more banks - North County Bank of Arlington, WA, and Haven Trust Bank Florida of Ponte Vedra Beach, FL. Not to diminish that, but we were particularly interested in the fact that, on the same day, the National Credit Union Administration assumed control of three undercapitalized corporate credit unions that it found were “not viable.” These institutions were: