The Growing List of Failed Banks

I am not really worried about Citi right now, despite that investors who question the bank’s ability to sustain mounting losses from toxic loans and bad investments have pushed Citi stock to below $4 a share on Friday, the lowest in 16 years (hope you didn’t buy Citi stock). Citi has raised some $70 billion since the sub-prime led crisis began last summer. A few weeks ago, it received another $25 billion bailout money from the government. But now the once-largest bank in the world only has a market value of $20.5 billion. I guess the government should wait till now to buy the entire bank, so nobody worries about their cash position. BTW, the bank is reportedly talking to the government to get another round of capital injection (Reuters).

While Citi is still hanging in there, there are smaller banks that are not so lucky, falling victim to the financial crisis. FDIC today announced that three more bank and thrifts have failed:

• PFF Bank and Trust, Pomona, CA
• Downey Savings and Loan, Newport Beach, CA
• The Community Bank, Loganville, GA

Downey is the 23rd largest bank in the nation and PFF ranks 38th.

So far this year, a total of 22 banks and thrifts have been taken over by the government. And the pace of bank failures has accelerated in recent months: 4 in October and 5 in November. With one more month to go, expect more to be added to the growing list.