[Iran Press TV Latest] Nine failed banks were seized by US authorities on Friday, the most in a single day since the global economic crisis began. A total of 115 banks have failed in the US in 2009, the highest annual number since 1992.
Twenty-five banks failed last year but only three collapsed in 2007.
The collapse of the Los Angeles-based California National Bank, which was one of the nine banks seized, was the fourth biggest US bank failure this year.
On Friday, US Bancorp acquired the nine banks that had been held by FBOP Corp, picking up $15.4 billion in deposits and $18.4 billion in assets.
"We're getting ready to turn everything over to U.S. Bank," said Roberta Valdez, a spokeswoman for the Federal Deposit Insurance Corp. She added "They will continue to operate as normal in the interim," referring to lenders acquired from FBOP.
Besides California National Bank, the other banks seized were Bank USA, NA, in Phoenix; San Diego National Bank; Pacific National Bank in San Francisco; Park National Bank in Chicago; Community Bank of Lemont in Illinois; and North Houston Bank, Madisonville State Bank, and Citizens National Bank in Teague, which are all in Texas.
Banks have been especially damaged by failed real estate loans. Banks that had lent to supposedly solid businesses are suffering losses as buildings sit vacant. As development projects collapse and slowly shut down, builders are defaulting on their loans.
According to the FDIC's confidential problem list, the number of banks on the list jumped to 416 at the end of June from 305 in the first quarter, which is the highest increase since June 1994. Around 13 percent of the banks on the list end up failing.