FDIC says community banks continue to struggle
Although many of the nation’s largest banks have recovered, hundreds of small lenders remain at risk, according to the federal government’s latest report card on the financial industry.
The Federal Deposit Insurance Commission (FDIC) said today its list of “problem banks” – those with the highest risk of failing – has grown to 860 from 829, or nearly one in nine lenders. Most are small community banks that remain saddled by bad real estate loans.
The FDIC has shuttered more than 149 banks in 2010, including about 41 in the third quarter.
Last Friday, First Banking Center of Burlington became the third Wisconsin bank to be closed by regulators because of the financial collapse of the Great Recession. The bank was closed Friday by the Wisconsin Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Michigan Bank of Troy, Mich., to assume all of the deposits of First Banking Center.
Earlier this year, regulators closed Maritime Savings Bank, West Allis, which became part Brookfield-based North Shore Bank. In 2009, the Bank of Elmwood in Racine was closed and became part of Tri City National Bank.
Meanwhile, Milwaukee-based Legacy Bank has been ordered to raise capital and begin talks with other area banks about potential mergers or acquisitions. The board of governors of the Federal Reserve System ordered the corrective action last week, giving the bank 60 days to take corrective action.
Wisconsin’s largest bank, Marshall & Ilsley Corp., continues to struggle with a net loss of $483.5 million through the first nine months of the year.
To read the full FDIC report, visit http://www2.fdic.gov/qbp/2010sep/qbp.pdf.
