Bank Failure Friday: Omni National Bank
It’s turned into kind of a joke: “Failure Friday” has become a staple on many finance and mortgage blogs. Friday seems to be the day that regulators seize failing banks, and in the current climate, some people really like to hear about these failures. Failure Friday is almost an official term. I haven’t really got the whole Failure Friday thing here, but this week marks the 21st bank failure of 2009, and I thought I’d share something I’ve run across.
Of course, right now it’s more of a rumor. Bloomberg announced that Omni National Bank in Atlanta was seized. The FDIC, however, has not yet commented. So it will be interesting to see if it’s true. There were branches in Illinois, Texas, Georgia and Florida. Additionally, Pennsylvania and Alabama had loan offices.
I thought it might be interesting to show this handy interactive map offered by The Street:
As you can see, failed banks are costing hundreds of billions of dollars, but we’re still a ways from $1 trillion. Some analysts think that we’ll eventually get there, but I’m not so sure. After all, serious efforts are being made to get toxic assets off of major banks, and there are hopes that economic stimulus efforts will result in more liquidity and fewer bank failures.
It’s interesting, though, to see the concentration of bank closings. For the most part, the bubble real estate markets of recent years have seen the most bank closures. It seems as though bank failures are following along with the fate of the real estate markets they are in. This does make sense — since many banks are failing as the mortgages they hold go into default. I know that the single bank that has closed here in Utah is one that was heavily invested in builders and recent boom in Salt Lake City real estate. I’d imagine that there are similar patterns elsewhere.
