WASHINGTON — Regulators on Friday closed a small bank in Texas, boosting to 74 the number of U.S. bank failures this year.
The number of closures has fallen sharply this year as banks have worked their way through the bad debt accumulated in the recession. By this time last year, regulators had shuttered 129 banks.
The Federal Deposit Insurance Corp. seized First International Bank, based in Plano, Texas, with seven branches, $239.9 million in assets and $208.8 million in deposits. Houston-based American First National Bank agreed to assume the assets and deposits of the failed bank.
The failure of First International Bank is expected to cost the deposit insurance fund $53.8 million.
It was the first bank in Texas to fail since February 2010. Failures have been concentrated in California, Florida, Georgia and Illinois.
In all of 2010, regulators seized 157 banks, the most in any year since the savings-and-loan crisis two decades ago. Those failures cost around $21 billion. The FDIC has said 2010 likely was the high-water mark for bank failures from the Great Recession.
In 2009, there were 140 bank failures that cost the insurance fund about $36 billion, a higher price tag than in 2010 because the banks involved were bigger on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.
From 2008 through 2010, bank failures cost the fund $76.8 billion. The deposit insurance fund fell into the red in 2009. With failures slowing, the FDIC’s fund balance turned positive in the second quarter of this year; it stood at $3.9 billion as of June 30.
Depositors’ money — insured up to $250,000 per account — is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July 2010.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
