The New Year Brings Bad Tidings?

This New Year hasn’t started well for the economy, has been especially difficult for smaller, local banks. The first bank to close, which happened two days ago on January 9th, was Horizon Bank of Washington, based in Bellingham, Washington; all of the eighteen branches were closed. It shouldn’t feel too bad though, considering that there is a great possibility of other bank failures. There isn’t too much to worry about for the customers of Horizon Bank of Washington though; it was bought almost immediately after it was failed. The eighteen branches that were failed are now under the control of the Washington Federal Savings and Loan Association. There is an estimated 200 bank failures to come from the American Banking News. They state: “including failed credit unions, which when added to 2009 bank failures came to 171 total. Of those, 140 were banks."
The FDIC is insuring users of Horizon Bank of Washington only up to 250,000 dollars per bank account by the end of the weekend by writing checks, using ATMs and using debit cards. Benzinga states that the FDIC is already in debt up to 8.2 billion dollars, and that this is a cause for concern, considering the fact that this bank failure is going to cost them 539 million dollars. Benzinga also states: “The finances of Horizon Bank deteriorated as a weak real estate market and non-performing construction loans led to its failure.”
CNNmoney.com states: “Every Horizon branch will reopen Saturday during their normal business hours as branches of Washington Federal Savings and Loan Association.” On Monday, bankers with deposits over $250,000 will be able to check the website and see if their accounts are fully insured. Though, that doesn’t seem too reassuring for the unfortunate bankers of Horizon, it’s all they have to hope for in this strained economy.