@Risk

Last Friday, regulators shut down three more banks, bringing the total of U.S. bank failures to four so far this year.

Take a look at the data from the past few years, and it’s easy to see that banks (small banks, in particular) have taken a big hit from the recession:

Year                               Total Bank Failures
2010, to date               4
2009                               140
2008                               25
2007                              3

(Note: That 140 total in 2009 is the highest level since 1992, when regulators were still mopping up from the savings and loan mess.)

The latest bank casualties were:

• Kaysville, Utah-based Barnes Banking Co. with $827.8 million in assets and $786.5 million in deposits
• St. Stephen, Minnesota-based Stephen State Bank with $24.7 million in assets and $23.4 million in deposits
• Antioch, Illinois-based Town Community Bank and Trust with $69.6 million in assets and $67.4 million in deposits.

Lingering concerns about the banking industry continue to dampen optimism about an economic recovery, and in fact, many experts fear the situation may get even worse before it gets better.  According to Zacks Equity Research:

As the industry tolerates bad loans that were made during the credit explosion, the trouble in the banking system goes even deeper, increasing the possibility of more bank failures.

Complicating the picture even more, MyBankTracker reports that the FDIC was unable to find an assuming institution for the Barnes Banking Company. Instead, the FDIC had to create the  Deposit Insurance National Bank of Kaysville which will remain open until February 12, 2010, giving customers time to open accounts elsewhere.

Of course, depositors’ accounts are still insured up to the $250,000 limit, but it’s worrisome to think that the market may not be able to absorb any more failed banks –and it seems that the credit crunch is going to continue to plague suppliers for the quite some time.