Bank Failures Up to 73, But Troubled Loans Slowing: FDIC

Pinehurst Bank in St. Paul, Minnesota became the 73rd bank failure this year – one of a string of neighborhood banks throughout the country unable to survive faltering loans and slumping demand for credit. The Federal Deposit Insurance Corp. expects the rate of bank closures to peak later this year, and it reported some encouraging signs in the overall banking industry’s recovery with its first quarter results released Thursday.

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FDIC: ‘Problem’ Banks Up to 775, But Industry Earnings Up

The number of insured commercial banks and savings institutions on the Federal Deposit Insurance Corp.’s “Problem List” jumped from 702 to 775 during the first quarter, with their total assets increasing from $403 billion to $431 billion. However, the FDIC reported overall “positive signs of recovery” in the banking industry in its first quarter 2010 report released today.

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Turf Battle: FDIC Kept Away by WaMu’s Chief Regulator

Washington Mutual’s primary regulator, the Office of Thrift Supervision, prevented the Federal Deposit Insurance Corp. from properly examining the troubled loan files of the Seattle-based thrift before it became the largest bank failure in U.S. history, according to testimony today during a Senate hearing. Testimony by FDIC Chairman Sheila Bair and John M. Reich, the OTS director at the time, offers a glimpse at a lack of interagency cooperation among banking regulators in the prelude to WaMu’s downfall.

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FDIC Seizes South Carolina Bank, Failures at 42 for Year

Federal regulators have seized a bank based in Myrtle Beach, South Carolina which had invested in coastal real estate development, the first to be taken over from that state since 1999 and bringing this year’s total bank failures to 42. Beach First was hit with failing real estate-backed loans from investments in upscale condominium and other projects along the coastal community.

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