58 Banks Closed So Far in 2011

There have been 58 bank closures through July 22, five of them in Illinois, including one in St. Charles.

Daily Markets looks at the current climate.

Looking back, there were 157 bank failures in 2010, 140 in 2009 and 25 in 2008.

While the financials of bigger banks have been stabilizing on the back of an economic recovery, many smaller banks are still struggling to survive. Nagging issues like rock-bottom home prices along with still-high loan defaults and unemployment levels continue to trouble such institutions.

Lingering effects of the financial crisis continue to weigh on many banks. It becomes a prerequisite for such banks to absorb bad loans offered during the credit explosion, making them susceptible to severe problems. The uncertain environment is aggravating the risk of bank failures even further.

Failures were expected to peak in 2010, and it looks like the numbers are on track for fewer failures in 2011, but it won’t be a precipitous fall.