2008 Failed Banks and Credit Unions

Failed Bank

2008 shaped to be a very bad year, if not the worst ever, for financial institutions, big or small alike. Big companies such as Citigroup, American International Group, and Fannie Mae and Freddie Mac needed billions of dollars from Uncle Sam to stay afloat, as losses from band loans, which triggered the current global financial crisis, mounted. After the government set up the $700 billion TARP fund in October to rescue the financial industry, the Treasury Department has invested $162 billion out of $250 billion created under TARP’s Capital Purchase Program as of December 23, 2008, according to the Treasury. However, no every bank was lucky to be bailed out. Many failed before the the TARP program was established, eve more went under after the rescue fund was created.

And even with the bailout money, troubles at banks continue to grow. When the FDIC released its third quarter bank profile reports in November, the number of so-called problem banks soared to 171 from 117 in the second quarter. According to the FDIC, a total of 25 banks failed in 2008, that’s more than 8 times the number of bank failures in 2007 when only 3 banks were closed. Among 2008 bank failures, only 4 happened in the first half of year and the problem didn’t really get people’s attention until early July when IndyMac was seized by authorities. Then there came the mega failure of Washington Mutual in September, the thrift with $307 billion assets. In the last four months of 2008, a total of 15 banks were shut down, 9 in October and November, as shown in the following list.

  1. Douglass National Bank, Kansas City, MO (Closed on January 25, 2008, assets at close $58.5 million)
  2. Hume Bank, Hume, MO (Closed on March 7, 2008, assets at close $18.7 million)
  3. ANB Financial, NA, Bentonville, AR (Closed on May 9, 2008, assets at close $2.1 billion)
  4. First Integrity Bank, NA, Staples, MN (Closed on May 30, 2008, assets at close $54.7 million)
  5. IndyMac Bank, Pasadena, CA (Closed on July 11, 2008, assets at close $32.01 billion)
  6. First National Bank of Nevada, Reno, NV (Closed on July 25, 2008, assets at close $3.4 billion)
  7. First Heritage Bank, NA, Newport Beach, CA (Closed on July 25, 2008, assets at close $259 million)
  8. First Priority Bank, Bradenton, FL (Closed on August 1, 2008, assets at close $million)
  9. The Columbian Bank and Trust, Topeka, KS (Closed on August 22, 2008, assets at close $752 million)
  10. Integrity Bank, Alpharetta, GA (Closed on August 29, 2008, assets at close $1.1 billion)
  11. Silver State Bank, Henderson, NV (Closed on September 5, 2008, assets at close $2.0 billion)
  12. Ameribank, Northfork, WV (Closed on September 19, 2008, assets at close $115  million)
  13. Washington Mutual Bank, Henderson, NV and Washington Mutual Bank FSB, Park City, UT     (Closed on September 25, 2008, assets at close $307 billion)
  14. Main Street Bank, Northville, MI (Closed on October 10, 2008, assets at close $86 million)
  15. Meridian Bank, Eldred, IL (October 10, 2008, assets at close $36.88 million)
  16. Alpha Bank & Trust, Alpharetta, GA (Closed on October 24, 2008, assets at close $354.1 million)
  17. Freedom Bank, Bradenton, FL (Closed on October 31, 2008, assets at close $281 million)
  18. Franklin Bank, SSB, Houston, TX (Closed on November 7, 2008, assets at close $5.1 billion)
  19. Security Pacific Bank, Los Angeles, CA (Closed on November 7, 2008, assets at close $561.1 million)
  20. The Community Bank, Loganville, GA (Closed on November 21, 2008, assets at close $681 million)
  21. Downey Savings and Loan, Newport Beach, CA  (Closed on November 21, 2008, assets at close $12.8 billion)
  22. PFF Bank and Trust, Pomona, CA  (Closed on November 21, 2008, assets at close $3.7 billion)
  23. First Georgia Community Bank, Jackson, GA (Closed on December 5, 2008, assets at close $237.5 million)
  24. Haven Trust Bank, Duluth, GA (Closed on December 12, 2008, assets at close $572 million)
  25. Sanderson State Bank, Sanderson, TX (Closed on December 12, 2008, assets at close $33 million)

Banks weren’t the only savings institutions that failed in 2008. National Credit Union Administration (NCUA), the regulatory agency of the nation’s credit unions, also closed 14 credit unions last year.

  1. Norlarco Credit Union, Ft. Collins, CO (Closed on January 24, 2008, assets at close $290 million)
  2. St. Luke Baptist Federal Credit Union, Laurelton, NY (Closed on May 5, 2008, assets at close $49,734)
  3. Father Burke Federal Credit Union, Bronx, NY (Closed on May 12, 2008, assets at close $1.2 million)
  4. Cal State 9 Credit Unions, Concord, CA (Closed on July 1, 2008, assets at close $339 million)
  5. Sterlent Credit Union, Pleasanton, CA (Closed on July 1, 2008, assets at close $94.6 million)
  6. Meridien F.A. Federal Credit Union, Meriden, CT (Closed on July 16, 2008, assets at close $337,968)
  7. New London Security FCU New London, CT (Closed on July 28, 2008, assets at close $12.7 million)
  8. Port Trust Federal Credit Union, Charleston, SC (Closed on August 8, 2008, assets at close $460,900)
  9. Valley Credit Union, San Jose, CA (Closed on September 3, 2008, assets at close $257 million)
  10. Interfaith Federal Credit Union, East Orange, NJ (Closed on September 17, 2008, assets at close $388,000)
  11. Kaiperm Federal Credit Union, Oakland, CA (Closed on September 29, 2008, assets at close $91 million)
  12. TEXDOT-WF Credit Union, Wichita Falls, TX (Closed on October 3, 2008, assets at close $50 million)
  13. High Desert Federal Credit Union, Apple Valley, CA (Closed on October 16, 2008, assets at close $149 million )
  14. West Hartford Credit Union, Farmington, CT (Closed on December 5, 2008, assets at close $2.9 million)

Though a failed bank may not necessarily result in losses of savers directly as long as their deposits at the institution are under the FDIC or NCUA insurance limit (both at $250,000 till the end of 2009) and savers won’t even notice any difference at the bank if it’s purchased immediately by another bank, it will never be pleasant to learn that my bank has been shut down.

*Photo from NYT

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