US bank failures peak - 37 lenders shut down in less than 3 months

The total number of failed banks this year so far climbed to 37 with the Federal Deposit Insurance Corporation (FDIC) announcing the closure of seven more banks on Friday, of which the deposits of six, except Advanta Bank Corp., have been transferred to other banks.

At this time last year there were only 17 failures reported; total failures last year were at 140.

The latest failures include the First Lowndes Bank, in Fort Deposit, Alaska (total assets $137.2 million); the Appalachian Community Bank in Ellijay, Georgia ($1.01 billion); the Bank of Hiawassee, in Hiawassee, Georgia; the Century Security Bank in Duluth, Georgia ($96.5 million); State Bank of Aurora, in Aurora, Minnisota ($28.2 million); the Advanta Bank Corporation, Draper, Utah; and the American National Bank of Parma, Ohio ($70.3 million).

The 10-branch Appalachian Community Bank was the largest of the Georgia banks to go down on Friday, with $1.01 billion in assets. The FDIC estimated the loss to its insurance fund of $419.3 million.

The Advanta Bank Corp, with estimated assets of $1.6 billion was unable to find an assuming institution. The bank had an estimated $247,000 in uninsured deposits at the time of its closing on Friday. The estimated cost to the FDIC insurance fund is $635.6 million.

While the FDIC warned last year that they are expecting bank failures to continue into 2011, they have assured depositors that the Deposit Insurance Fund remains sufficiently funded to continue to insure all of their deposits up to the fully insured amount, currently $250,000 for most banks.