Record number of failed banks reported in US for February

March 1, 2009

According to the Federal Deposit Insurance Corporation (FDIC), a record number of banks for a calendar month have failed in the United States in February. A total of 10 banks failed in February, more than any other month since October of 2000. A total of 16 banks have closed this year so far, with 24 closing in 2008. If the current trend continues, the total number of failed banks will more than double in March, as compared to the total number of failed banks in 2008.

The list grew after the FDIC took over the funds from the Security Savings Bank of Henderson, Nevada and the Heritage Community Bank in Glenwood, Illinois on February 27. The FDIC issued press releases for both institutions.

The four branches of the Heritage Community Bank reopened on February 28 "as branches of MB Financial Bank," stated the FDIC. The bank's assets were worth nearly US$233 million and had customer deposits worth nearly $220 million. MB is expected to purchase $230 million of the bank's assets and the FDIC will "retain the remaining assets for later disposition."

"The two Security Savings Bank branches will reopen on Monday (March 2) as branches of Bank of Nevada," stated the FDIC. The bank held assets worth approximately $238.3 million with customer deposits of nearly $180 million. Bank of Nevada will purchase approximately $111 million of the bank's assets while the FDIC will retain the remaining balance, also "for later disposition."

"The FDIC insures deposits at the nation's 8,305 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed," added the FDIC.

Both banks, when reopened, will immediately become members of the FDIC.