Three more banks were taken over Friday by the FDIC, including Silverton in Atlanta GA, the nation’s largest bank of banks, with 1,500 customer banks.
Silverton killed itself by drinking too much housing boom kool-aid. It created a huge portfolio of residential real estate construction projects. Some of these loans were syndicated out to smaller shareholder banks. But when the market for the loans collapsed in 2007, it was stuck holding a bunch of debt that quickly went toxic.
Someone recently told me he could think of 4-5 small banks in a prosperous California city that already were effectively dead.
There are lots more bank failures coming.