The decline in financial failure has been one of the big themes of the U.S. economic recovery over the past few years. As a general rule, corporate bankruptcies, debt defaults, and bank failures have been decreasing steadily. But last Friday, the Federal Deposit Insurance Corporation’s bank-closure SWAT teams partied like it was 2009, closing five banks and bringing the total number of failures to 2012. (The completed failed bank list can be seen here.)
Palm Desert National Bank, a one-branch bank with $126 million in assets based in Palm Desert, California, failed and was taken over by Pacific Premier Bank in nearby Costa Mesa.
Plantation Federal Bank, a six-branch bank with $486 million in assets based in Pawleys Island, South Carolina, failed and its deposits were taken over by First Federal Bank in Charleston, South Carolina.
InterBank, a four-branch bank with $481 million in assets based in Maple Grove, Minnesota, failedand was taken over by Great Southern Bank of Reeds Spring, Missouri.
HarVest Bank of Maryland, a four-branch bank with $164 million in assets based in Gaithersburg, Maryland, failed and was taken over by Sonabank of McLean, Virginia.
Bank of the Eastern Shore, a bank based in Cambridge, Maryland, with $166 million in assets, failed. Since no buyer could immediately be found, the FDIC created a new entity to manage accounts until depositors can move their money to other banks.
This was the worst Friday for bank closures since April 29, 2011, when five banks were closed. Together, the five banks closed last Friday had combined assets of $1.423 billion. So, through the first 17 weeks of 2012, 22 banks with a combined $6.5 billion in assets failed. That compares with 39 banks with a combined $16.96 billion in assets that failed in the first 17 weeks of 2011.
Daniel Gross is economics editor at Yahoo! Finance
Follow him on Twitter @grossdm; email him at firstname.lastname@example.org
His new book, Better, Stronger, Faster: The Myth of American Decline and the Rise of a New Economy, will be published by The Free Press on May 8.