WASHINGTON: Regulators in the US closed two small banks on Friday, bringing the total number of shuttered institutions in 2011 to 25.
In 2010 157 banks failed while 140 failed in 2009. The bulk of the closed banks have increasingly been smaller institutions, those with less than $1 billion in assets, as large banks have recovered more quickly from the 2007-2009 financial crisis.
The FDIC announced on Friday that authorities closed Legacy Bank in Milwaukee, Wisconsin, which had $190.4 million in assets as of Dec. 31, 2010. Seaway Bank and Trust Co, Chicago, has assumed Legacy's deposits.
The other closed bank was the First National Bank of Davis in Davis, Oklahoma, which had about $90.2 million in assets as of Dec. 31, 2010. The Pauls Valley National Bank in Pauls Valley, Oklahoma will assume all of the deposits of The First National Bank of Davis.
Both closed banks had one branch each.
In the FDIC's most recent quarterly report, released on February 23, the agency said the number of banks on the "problem list" grew to 884 from 860.
Most of these institutions will not fail but the list provides an indication of how many banks are struggling.
When releasing the latest quarterly results, however, FDIC Chairman Sheila Bair said the outlook for the industry as a whole is improving, including for small institutions.
In its quarterly update the FDIC reported that banks had combined earnings of $21.7 billion in the fourth quarter of 2010, marking their fourth profitable quarter in a row.
But statistics showed lending continued to contract, down 0.2 percent or $13.6 billion for the quarter, and Bair warned it would have to pick up for the industry to take the next step in its recovery from the 2007-2009 financial crisis.
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