Florida is home to nation's 100th bank failure as heavy closings prompt reassurance from FDIC
Three of those failures, including Partners, took place in Florida. Read more here about the Florida failures. We'll say a bit more about the three Florida failures, which bumped the number of Florida bank closings this year from six to nine, in a moment.
What the 100th failure did inspire was a new video by FDIC Chairman Sheila C. Bair (in photo, by AP), which was the deposit insurance chief's attempt to offer reassurance to depositors that (despite the FDIC insurance fund being already in the red from covering all those bank failures) that federally-insured bank deposits are as safe as ever. Watch the video here at the FDIC Web site or here on YouTube.
The point is we have not faced 100-plus bank failures in one year in quite awhile (since 1992) and expectations are we will see a bunch more before things calm down again. Hence the Bair reassurance speech.
Why do we care? Because it is crucial that all depositors at FDIC-insured banks pay attention to how much money they have in one bank and whether their accounts are properly structured to make sure those deposits are fully insured.
Depositors at Partners Bank and Hillcrest Bank Florida, both of Naples, and Flagship National Bank of Bradenton -- the three Florida banks to fail and be put in the hands of other banks over the weekend -- would be very glad to day if they paid attention to deposit insurance. Lucky for them, the acquiring banks of the failed Florida banks, agreed to take over all the deposits.
But the FDIC very easily could have enforced the limits it places on deposit insurance and some depositors could have found themselves on the losing end with unprotected deposits. Find out how deposit insurance works here. For more insight into the two bank failures in Naples,here's the local story at NaplesNews.com.
And here's the Bradenton Herald's take on the closing of the local Flagship bank. The bulk of the nine Florida bank failures so far this year are concentrated in a strip from Bradenton south to Naples. which also happens to be the part of coastal Florida that's suffered the greatest backlash to runaway housing prices.
For the record, here are all nine bank failures so far this year in the state:
1. Ocala National Bank, Ocala
2. Riverside Bank of the Gulf Coast, Cape Coral
3. BankUnited, Coral Gables
4. Integrity Bank, Jupiter
5. First State Bank, Sarasota
6. Community National Bank of Sarasota County, Venice
7. Partners Bank, Naples
8. Hillcrest Bank Florida, Naples
9. Flagship National Bank, Bradenton
--Robert Trigaux, Times Business Columnist