Are you looking for information about bankrupt banks and how their accounts and loans are affected? Are you wondering how providers can file bankruptcy lawsuits? In this article, we'll provide a summary of bank failures in 2020, as well as information on how to obtain a lien release and what happened to First City Bank of Florida. Regulators closed two banks on Friday, bringing the total number of federally insured bank bankruptcies this year to 22. The two banks were Carson River Community Bank, based in Carson City, Nevada, and Rainier Pacific Bank in Tacoma, Washington. The FDIC said that the Carson River deposits will be taken over by Reno, Nev., and the only Carson River branch will reopen Monday as a Heritage Bank office. Rainier Pacific deposits will be taken over by Umpqua Bank in Roseburg, Oregon, and the 14 Rainier Pacific branches will reopen during normal business hours as Umpqua Bank offices.
According to FDIC officials, the pace of bank seizures this year is likely to accelerate in the coming months. Banks have been particularly affected by the bankruptcy of real estate loans, both residential and commercial. Banks that had lent to seemingly solid companies are suffering losses because the buildings remain empty. As development projects crumble, builders are not paying back their loans.
Smaller banks are more vulnerable to losses than their larger Wall Street counterparts, because commercial real estate represents a larger part of their portfolio. Executive Steven Freiberg will be its new executive director, starting next month. Despite a historically low number of bank failures in recent years, the slow and steady decline in the number of banks continues. As the graph below shows, the relatively constant rate of decline in the banking population since 1984 masks the high volatility in the rate of formation of new banks, bank failures and bank mergers.
The pandemic is likely to cause a large increase in loan defaults and other conditions that will stress banks out. If you're concerned about your bank's financial health or want to know more about how to protect yourself from potential losses due to bank failures, it's important to stay informed. Make sure you sign up for InvestmentNews updates so you can stay up-to-date on issues facing the financial advice community.
