Three additional banks failed on Friday, bringing the total number of failures this year to 84 as the banking industry continues to struggle with unexpected delinquencies and defaults on the loans on their books.
Federal regulators stepped in and shut down Bradford Bancorp, Inc. in Baltimore, MD, more commonly known as Bradford Bank. Affinity Bank of Ventura, California and Mainstreet Bank of Forest Lake, Minnesota were also shut down. The total expected costs to the Federal Deposit Insurance Corporation’s insurance fund is expected to be approximately $446 million.
The FDIC stated on Thursday that the balance of their insurance fund sat at $10.4 billion at the end of the second quarter, however, that number accounted for $32 billion set aside for expected bank failures over the next 12 months.
Current FDIC Chairman, Sheila Bair, has stated that there will continue to be an elevated number of bank failures as financial companies go through the process of cleaning up their balance sheets and recognizing losses on loans. Bair stated that the financial services industry would likely be a lagging indicator as the economy begins to improve.
