Starting with Horizon Bank in Bellingham, Washington, on Jan. 8, 2010 and ending with Community National Bank of Lino Lakes, Minnesota, on Dec. 17, 2010, a total of 157 banks insured by the FDIC failed last year. Their combined assets amounted to $92.1 billion and in taking them over, closing them or selling them to new owners, the FDIC took a $22.2 billion hit to its Deposit Insurance Fund, the stash of industry-funded money used to pay back guaranteed deposits when a bank goes under.
The head of the FDIC, Sheila Bair, has said frequently that she expects bank failures to have peaked in 2010. But she has also said that failures are likely to continue at elevated levels in 2011. As of the third quarter of 2010, some 860 banks institutions were on the FDIC’s problem list.
The administration is touting the small business lending bill Obama signed in late September, which was designed not only to help small businesses but also the small banks that lend to them by extending the same kind of easy money big Wall Street banks have been enjoying since the 2008 financial crisis. On Sunday, Austan Goolsbee, head of Obama’s Council of Economic Advisors, said he expects the bill to help “juice” the employment picture in 2011.