Bank failures likely to continue says FDIC spokesman

GAINESVILLE - Banks, particularly those in the Southeast, continue to take economic hits. And some of those hits are hard enough to prompt closures.

Dave Barr, with the Federal Deposit Insurance Corporation, said 30 Georgia banks failed in 2008 and 2009.

"We anticipate the pace from last year to continue, and to even exceed last year, where we saw 140 banks fail across the country," commented Barr.

Barr, who appeared this past week on WDUN's The Local Hour, said most Georgia banks that have changed ownership have done so because of development and commercial real estate loans that have gone unpaid. He noted that particular failure trend is prominent across the southeastern United States.

Barr emphasized that depositors should not worry about the safety of their money, even though banks are closed on a an almost-weekly basis. The mission of the FDIC is to protect depositors. He pointed to last week's transfer of ownership of Community Bank & Trust to a South Carolina bank as an example.

"It (Community Bank & Trust) was closed on a Friday and the next day it was re-opening as branch of a new bank," said Barr. "It's done that quickly, that seamlessly, for the depositors."

Bank closures are initiated by individual state banking commissions, and the FDIC is called to assist with the transitions, according to Barr. Bank closures are typically announced at the close of the business day on Fridays.