22 U.S. banks collapsed this year

By IANS
Monday, November 24, 2008

New York: As many as 22 American banks have collapsed this year so far, even as the banking giant Citigroup, led by Indian-American, Vikram Pandit, struggled this week to save itself from becoming number 23 in this fast growing long list.

On Friday, three US banks collapsed with two of them being in California and the third one in Georgia.

The two California banks which were shut down Friday are Downey Savings and Loan of Newport Beach and PFF Bank and Trust of Pomona. The 12.78 billion Downey, The Wall Street Journal, said is the third largest bank to fall this year. Topping the list is $307 billion Washington Mutual.

In Georgia the Community Bank of Loganville closed down.

With little signs of improvement, The Wall Street Journal said regulators expect more failures during the remaining part of this year and next year, as "rotting real estates and other loans continue to weigh down bank balance sheets."

The deposits and some of the assets of the two collapsed Californian banks were bought by US Bancorp, which now has emerged as one of the strongest US banks during the current financial turmoil. Deposits and assets of the Georgian bank was acquired by Bank of Essex from Virginia.

Among other banks, which collapsed this year - reflecting the deep trouble in which the US economy is in - include Franklin Bank (Houston), Security Pacific Bank (Los Angeles), Freedom Bank (Florida), Silver State Bank (Nevada), Columbian Bank and Trust (Kansas), First Priority Bank (Florida), First National Bank of Nevada, ANB Financial (Arkansas), IndyMac Bank (California).

The largest number of bank collapse has been reported from California.

Collapse of such a large number of American banks, despite a $700 billion bailout package reflects the deep turmoil of the US economy. From 2003 to 2007 only 10 US banks were reported to have collapsed. In 2008, the figure has already touched 22 and still more than a month to go.