Bank failures hit 106

The Federal Deposit Insurance Corp. closed seven banks Friday night, bringing the total number of failed banks this year to 106. This is the first time since 1992 -- the height of the S&L Crisis -- that bank failures have exceeded 100. On average about 10 banks have failed a month, but this week more banks failed than usual. At this rate it looks like there will be between 120 and 150 bank failures by the end of the year.

Of the banks that failed this week, three were in Florida, but Georgia still tops the list of states with the largest number of bank failures (20). So far Florida has had nine banks fail. Of those, Partners Bank in Naples, Fla., was the 100th bank that failed this year. It had $68.7 million in assets and $63.4 million in deposits. All deposit accounts have been transferred to Stonegate Bank in Fort Lauderdale, Fla. The failure is expected to cost the FDIC $28.6 million.

The two other Florida banks that failed were Hillcrest Bank Florida in Naples, Fla., which had $83 million in assets and $84 million in deposits and Flagship National Bank in Bradenton, Fla., with total assets of $190 million and total deposits of $175 million. Stonegate Bank in Fort Lauderdale, Fla., also picked up the deposits of Hillcrest Bank Florida and some of its assets. First Federal Bank of Florida, Lake City, Fla., picked up the deposits of Flagship National Bank.

Other banks that failed this weekend included:

• American United Bank in Lawrenceville, Ga., which had $111 million in assets and $101 million in deposits. Ameris Bank in Georgia picked up American United's deposits.
  
• Bank of Elmwood in Racine, Wis., with $327.4 million in assets and $273.2 million in deposits that were mostly handed over to Tri City National Bank, based in Oak Creek, Wis.
  
• Riverview Community Bank, based in Otsego, Minn., with $108 million in assets and total deposits of about $80 million. Stillwater, Minn.-based Central Bank is taking over Riverview Community Bank's deposits.
  
• First Midwest Bank of Itasca, Ill., took over failed bank First Dupage Bank in Westmont, Ill., which had $279 million in assets and total deposits of $254 million.

The failures will cost the Deposit Insurance Fund an estimated $356.6 million. This year bank failures cost the federal deposit insurance fund about $25 billion. The fund now stands at about $7.5 billion. Calculated Risk speculates that the FDIC Deposit Insurance Fund dipped into the red as of Sept. 30. FDIC Chairman Sheila Bair has proposed that banks prepay their deposit insurance premiums for the next three years so the agency does not have to tap the $500 billion credit line the FDIC has with the Treasury Department.

There reportedly are 416 banks on the FDIC's "problem" list. CreditSights predicts that 1,100 banks could fail between 2008 and 2011, according to Marketwatch -- so far in the last two years only 131 banks have failed. The LRC Blog has flagged a list of the next banks that could fail. The FDIC expects $70 billion in losses due to failed banks over the next five years.

- Maria Woehr