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Saturday, January 23, 2010

The bailout...that keeps on giving.

More banks are being taken over by the government...even as the big banks are rollin' in the dough.


From the Chicago Tribune...Regulators shut down banks inFlorida and Missouri on Friday, bringing to six the number of bank failures so far in 2010, following 140 closures last year in the toughest economic environment since the Great Depression.

The Federal Deposit Insurance Corp. took over Miami-based Premier American Bank, with $350.9 million in assets and $326.3 million in deposits, and Bank of Leeton, in Leeton, Mo., with $20.1 million in assets and $20.4 million in deposits. Sunflower Bank, based in Salina, Kan., agreed to assume the deposits of Bank of Leeton. The FDIC will retain most of its assets for later sale.

As the economy has soured, with unemployment rising, home prices tumbling and loan defaults soaring, bank failures have accelerated and sapped billions out of the federal deposit insurance fund. It fell into the red last year.

The 140 bank failures last year were the highest annual tally since 1992, at the height of the savings and loan crisis. They cost the insurance fund more than $30 billion. The failures compare with 25 in 2008 and three in 2007.

The number of bank failures is expected to rise further this year. The FDIC expects the cost of resolving failed banks to grow to about $100 billion over the next four years.

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