Federal regulators from the Federal Deposit Insurance Corporation (FDIC) seized banks in Florida, Georgia and Pennsylvania late last week. The seizures mark the first bank failures of 2012, continuing an unfortunate trend that began with the economic recession of 2008. Hundreds of banks have fallen prey to closures during the economic crisis. Last year, 92 banks were shut down by the FDIC, markedly lower than the 157 closures seen in 2010. Regulators expect that the number of closures will be lower this year than it had been in previous years.
The closing of banks puts some stress on the nation’s insurance fund as the FDIC seeks to return money to consumers. In Pennsylvania, the American Eagle Savings Bank was closed by regulators. The bank will cost the insurance fund $3.2 million. The Central Florida State Bank was closed as well, which will cost the insurance fund more than $24 million. The closing of Georgia’s First State Bank is the costliest of the bunch, gouging the insurance fund for $216 million.
While the FDIC insurance fund is in no danger of collapsing beneath the weight of failing banks, the recent closures have made a noticeable impact. Regulators note that banks will have to pay special care to the investments and insurance policies they make in order to weather the still turbulent waters of the nation’s economy. More closures will put stress on the insurance fund, which could have major implications for the FDIC’s ability to continue insuring deposits made by consumers.