On Friday the Federal Deposit Insurance Corporation (FDIC) closed and sold off four more banks, bringing the total shuttered this year to 84. The FDIC’s Deposit Insurance Fund paid out $358 million to enable the transactions to take place, with additional losses being borne by the failed banks’ new owners. Through 2010 the FDIC has paid out $76 billion and the total is likely to exceed $100 billion by the end of this year.
The losses resulted from the FDIC making good on the banks’ bad investments, mostly related to real estate, that went sour during the recession. Under current rules, depositors were made whole if their accounts were valued at $250,000 or less.
The banks just closed were Decatur First Bank in Decatur, Georgia; Community Capital Bank in Jonesboro, Georgia; Old Harbor Bank in Clearwater, Florida; and Community Banks of Greenwood, Colorado. The banks picking up the remains included State Bank and Fidelity Bank in Georgia, First United Bancorp in Florida, and Bank Midwest out of Kansas City, Missouri. Georgia now leads the country in failed banks during the recession with a total of 21, while Florida has had 12 banks closed so far. More than 400 banks have been closed by the FDIC since 2007, compared to an average of four bank closings per year prior to the start of the recession.
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