JOIN USThe number of bank failures in the world's largest economy since September 2008, when the economic turmoil turned for the worse, has crossed the 50-mark.
Reflecting the ravaging nature of the crisis, 37 banks have gone belly up so far in 2009, which is much higher than a total of 25 collapses for the whole of 2008.
Since September last year, the number of bank failures have touched 51 and is expected to rise in the coming weeks.
According to the Federal Deposit Insurance Corp (FDIC), which is often appointed as the receiver of failed banks, the Bank of Lincolnwood was shuttered on June 5.
FDIC last month said the number of "problem" banks in the country has climbed to 305 in the first quarter of 2009 and is also the highest in 15 years.
Bank of Lincolnwood had total assets of USD 214 million and deposits worth USD 202 million as on May 26, 2009. Further, the Republic Bank of Chicago has agreed to purchase about USD 162 million in assets while the remaining would be held by FDIC for later disposition.
The "problem banks" stood at just 252 in the December quarter, indicating that the economic situation has deteriorated in the ensuing months.
In May alone, seven banks were shut down by the authorities. Since January 2008, a total of 62 banks have collapsed since January 2008. The US economy officially entered into recession in December 2007. It shrunk by 6.1 per cent in the first quarter of this year.
This year, four banks each were shut down on February 13 and April 24, while three banks each collapsed on January 30, February 6 and March 20.
Among the banks which have failed this year are Silverton Bank, America West Bank, Citizens Community Bank, Great Basin Bank of Nevada, Colorado and First Bank of Idaho.
The recent data from FDIC, which also insures bank deposits, showed that insured institutions set aside USD 60.9 billion in provisions for loan losses in the first quarter, a rise of USD 23.7 billion over the same period a year ago.
Moreover, the insured institutions wrote down bad loans worth USD 37.8 billion, almost twice that of USD 19.6 billion in the year-ago period.
"... the banking industry still faces tremendous challenges, and that going forward, asset quality remains a major concern... Troubled loans continue to accumulate, and the costs associated with impaired assets are weighing heavily on the industry's performance," FDIC Chairman Sheila C Bair said last month.