AP: Regulators close 6 banks on Friday.
Georgia leads the nation in the number of bank failures this year. Federal regulators closed three more banks in Georgia on Friday, bringing the total number of failed banks in Georgia to 24. Illinois is second with 20 failed banks, and California is third with 15 failed banks.
Greater Atlantic Bank in Virginia, Benchmark Bank in Illinois, and AmTrust Bank in Ohio were also closed Friday, bringing the total number of bank failures in 2009 to 130. AmTrust Bank in Cleveland, with $12 billion in assets, was the largest bank to fail yesterday.
The Georgia banks that closed were Buckhead Community Bank in Atlanta, First Security National Bank in Norcross, and The Tattnall Bank in Reidsville. The State Bank and Trust in Macon will assume the deposits and assets of Buckhead Community Bank, as well as most of the deposits and assets of First Security National Bank. HeritageBank of the South will assume deposits and assets of The Tattnall Bank.
Customers of all the six failed banks are protected by the FDIC, which insures bank deposits up to $250,000. This year 11 banks, on average, have failed per month, which has put tremendous strain on the FDIC's budget. Friday's closures are estimated to cost the FDIC over $2.4 billion, putting the FDIC $8.2 billion in the red.
These bank failures come at a time when other areas of the economy are showing signs of improvement. GDP, the main measure of our economic growth, returned to positive growth last quarter after decreasing by 3.7% since the recession began. But government stimulus programs like Cash for Clunkers dominated the economic expansion, and our increases in income have also been due primarily to increases in government transfer payments. Therefore, the economic recovery is more fragile than the GDP and personal income numbers may suggest. Friday's bank closures are a clear example of how our economy lacks adequate momentum needed to fully revover.
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