Bank Quakes: Smaller Continue to Fall Harder
Two Alabama banks were among the six banks that failed in the third week of April, pushing the total number of banks failures in the U.S. in 2011 to 34.
The Alabama banks were Nexity Bank, based in Birmingham, with $793.7 million in total assets, and Superior Bank, also based in Birmingham, with $3.0 billion in assets.
U.S. bank failures have risen on a curve that lags a couple years behind the overall economic decline. There were 25 failures in 2008, 140 in 2009 and 157 in 2010.
While big banks—many of which have received government bailout assistance—appear stable as the economy nudges up, many smaller banks continue to struggle and consolidate. They are challenged by depressed home prices, loan defaults and high unemployment.
Of the $245 billion in bailout money that went to U.S. banks, more than $20 billion is still owed by about 600 institutions, including Birmingham-based Regions Financial Corp.
Superior’s fortunes were particularly ill timed. The bank plunged into Florida just before the worst of the housing crash, acquiring banks in Tampa and Sarasota.