Without fanfare five more banks fail and are seized by the FDIC.
Georgia and Florida are again ravaged by the FDIC on a Friday afternoon. They each lost two banks, Georgia their 60th and 61st and Florida, the 48th and 49th.
The FDIC, through April, has closed 39 banks, ten of them in the Peach State. Georgia leads the nation in bank failures, a result of lax regulation and capital requirements.
Florida, number two in lost banks since the crisis began, has lost only 4 this year attributed to poor lending practices and over-leveraged balance sheets.
The Wall Street Journal continues to track bank failures since the beginning of the crisis in 2008, tracking all 361 failures.
The FDIC had to pay $643 million from the Deposit Insurance Fund (DIF) for the five banks closed on Friday, the 29th. Over $400 million for the two Georgia banks and $245 million for the other three banks in Florida and Michigan.
Georgia has cost the DIF $875 million this year. By comparison, Silverton Bank in Atlanta, closed by the FDIC on May 1 of 2009, cost the fund approximately $1.3 billion so Georgia banks have taken their toll on the Fund.
Adding to Alabama’s recent catastrophe, two Birmingham banks were closed by the FDIC just two weeks before the devastation of the tornadoes. Both were relatively large banks, costing the DIF $435 million.
April ended with only 13 banks failing, much better than the 23 that were taken over in the same month last year. But, only eight were closed in April, 2009.
The acceleration in the second half of the month is disconcerting. Eleven were closed on the last two Fridays of the month, excluding Good Friday.
Tomorrow will be the first Friday of May which will give us an indication of the continued acceleration or a slow down.
This is a development that we need to continue to watch.