Wash. state bank closes; first failure of '13
WASHINGTON (AP) - U.S. regulators on Friday closed a small lender in Washington state, making it the first bank failure of 2013 following 51 closures last year.
The Federal Deposit Insurance Corp. seized Westside Community Bank, based in University Place, Wash., and Sunwest Bank, based in Irvine, Calif., agreed to assume all of the failed lender's deposits and buy essentially all of its assets.
Westside Community Bank had $97.7 million in assets and $96.5 million in deposits as of Sept. 30. Its failure is expected to cost the deposit insurance fund $20.3 million.
U.S. bank closures have been declining since they peaked in 2010 in the wake of the financial crisis and the Great Recession.
In 2007, just three banks went under. That number jumped to 25 in 2008, after the meltdown, and ballooned to 140 in 2009.
In 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. The FDIC has said 2010 likely was the high-water mark for bank failures from the recession. They declined to a total of 92 in 2011.
Last year's bank failures trickled to 51, but that's still more than normal.
In a strong economy, an average of only four or five banks close annually. The sharply reduced pace of closings shows sustained improvement.
From 2008 through 2011, bank failures cost the deposit insurance fund an estimated $88 billion, and the fund fell into the red in 2009. But with failures slowing, the fund's balance turned positive in the second quarter of 2011. By Sept. 30, it stood at $25.2 billion, up from $22.7 billion at the end of June.
The FDIC expects bank failures from 2012 through 2016 to cost $10 billion.
The Federal Deposit Insurance Corp. seized Westside Community Bank, based in University Place, Wash., and Sunwest Bank, based in Irvine, Calif., agreed to assume all of the failed lender's deposits and buy essentially all of its assets.
Westside Community Bank had $97.7 million in assets and $96.5 million in deposits as of Sept. 30. Its failure is expected to cost the deposit insurance fund $20.3 million.
U.S. bank closures have been declining since they peaked in 2010 in the wake of the financial crisis and the Great Recession.
In 2007, just three banks went under. That number jumped to 25 in 2008, after the meltdown, and ballooned to 140 in 2009.
In 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. The FDIC has said 2010 likely was the high-water mark for bank failures from the recession. They declined to a total of 92 in 2011.
Last year's bank failures trickled to 51, but that's still more than normal.
In a strong economy, an average of only four or five banks close annually. The sharply reduced pace of closings shows sustained improvement.
From 2008 through 2011, bank failures cost the deposit insurance fund an estimated $88 billion, and the fund fell into the red in 2009. But with failures slowing, the fund's balance turned positive in the second quarter of 2011. By Sept. 30, it stood at $25.2 billion, up from $22.7 billion at the end of June.
The FDIC expects bank failures from 2012 through 2016 to cost $10 billion.
Expect far more small bank failures and even credit union failures. New rules and regulations are biased toward big banks and makes running a small, community bank more expensive, less profitable, and more difficult. The compliance regulations alone can cost a bank millions. While big banks can absorb this cost and pass it on to consumers, small banks can't and will fail. Fewer options for consumers, and more market domination by big banks make the finance market even more risky and prone to massive failure than before the collapse.
@GeorgeG. This point is true today, more than anytime since the breaking up of what was termed "The Money Trust" back early last century. Â Glass-Steagal was part of the money trust monopolies breaking up. Â GLB Act from the late 1990s, repealed most of that, setting us up for "Too Big to Fail" mega-mergers in banking, finance and insurance, while pumping up Wall Street indexes for more years. Â GLB Act also repealed all State's own definitions of usury, enabling credit and banking fees to skyrocket. Â So what would previously see underworld figures go to jail for loan Sharking and racketeering, literally got legalized, so those previously underworld figures, got into "legit biz.". Â GLB Act was one of the biggest more recent States Rights Loss, to too much power going to the Feds. Â It is easier and far more lucrative, for powerful lobbies to buy Washington DC, than each state, though that also happens. More legislation than anytime since prior to that, is also now effectively about "internal protectionism" on behalf of the already entrenched, largest players, in virtually all industries. Â Most elected officials don't read all of them, or if they do, cannot be expected to fully understand them, so their huge staffs or industry and trade plus labor union lobbyists, "explain the laws," since many bills are so large in page count, and complex. Â Since lobbying today is more about vote buying than ever before, and the stakes are so high with the huge sums "porked" here or there, top lobbyists can easily get paid many millions of dollars. Â So elected official's and top civil service staff and Appointees, can be counted upon to be constantly conflicted. Â Since they and their top staffers can leave directly from their "public service" role, to become millionaires lobbying. Lobbying done to help educate and explain to public officials, critical information for an industry, trade or union, can be a good thing. Â However, it has become mostly about vote buying, directing billions of dollars here, or there, or away from "them.". Like Innovators and other threats, virtually always by "the little guy," whether banking, Medtech and healthcare, among other industries. Â For example, legalized insurance monopolies in healthcare can do what is termed predatory conduct elsewhere, including restraint of trade, and some with impressive regularity, actually put providers and Doctors out of business, or merely threaten this or jail for billings fraud, as part of squeezing them from reimbursements. Â I actually saw one of the biggest nationally, "mistakenly" inform a small Doctor owned provider, how to recode their billings when that Doctor and Medical Director died, and the provider hired another Medical Director. Â Many months later that same major national insurance payor claimed the provider had tried to bilk the payor by hiding the fact the owner Doctor had died, as part of their refusing to pay a huge sum of reimbursements. Â The single mistake the small provider made, was not making sure they made very specific notes of the exact time they called the payor, to inform the payor the owning Doctor had died, plus getting the new billing code but most especially, the name of the payor staffer who "mistakenly" misinformed the provider, etc. Including with "the wrong new billing code.". Â Handy trick. Â The small provider was very nearly put out of business and a leading attorney in this area of work said, many big payers do this all the time, which I confirmed with another professional helping manage medical billings, at a major university. Unfortunately today, the odds an unusually ethical elected official could even hope to get enough of their colleagues on board with outlawing vote-buying lobbying, or requiring, for example, a ten year period after "public service", before someone can become a vote-buying lobbyist...are so remote that what the few ethical players say *anonymously*, today has become a system of governance where both parties and most top official's votes are effectively "for sale to the highest bidder", won't be changing anytime soon. Sent from my iPad