North Houston Bank was one of nine banks regulators shut down on Friday. As the still weak economy produces a string of loan defaults, the Federal Deposit Insurance Corporation (FDIC) says the U.S. Bank in Minneapolis has taken over deposits and most of the assets. For customers, that means they will still have access to funds as usual, being that this is similar to a merger.
But this latest round of closures is the most banks closed in one day since the financial crisis began. The FIDC points out that in a recession, it's usually the banking institutions that take the longest to recover.
"It's going to take some time to get there. As a function of that, there may be more failures as we go forward," said Marvin Payne of the FDIC. "From the customer's perspective, I would say that there should not be much of any concern. You have FDIC insurance. The FDIC, just as with this institution, had no customer lose any money because of the closure."
As for the nine closures, three of the banks are out of Texas including North Houston Bank. The other two Texas banks are Madisonville State Bank and Citizens National Bank. The remaining banks were from California, Arizona and Illinois. The closures bring the total number of U.S. banks this year to 115.
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