Number of U.S. bank failures falls in May

Number of closed banks by month

The number of U.S. national bank failures fell to five in May 2011 after a sharp jump to 13 in April but more closures are expected throughout 2011, according to a monthly bank failure report by
Trepp, released today. The May figure is the second-lowest count since July 2010, only outpacing three failures in March.

For the group of five failed banks, commercial real estate loans comprised $152 million, or 76 percent, of the total $201 million in nonperforming loans. Meanwhile, construction and land loans made up of $109 million or 54 percent of the total, while commercial mortgages comprised $44 million.

The residential real estate loan category was also a factor, with $31.4 million in non-performing loans, or 16 percent of the total non-performing balance.

One of the failures was the Coastal Bank in Florida, which had only two branches. The Federal Deposit Insurance Corporation, performing as receiver, sold the failed bank to Premier American Bank in Miami, which will assume all deposits.

Florida ranks second for national bank failures, with five failures year-to-date in 2011, coming second only to Georgia, with 12 failures year-to-date.

At the close of the first quarter, there were more than 200 banks of the Trepp Watch List with a failure risk score of eight or higher. Trepp considers any score above eight to represent a high likelihood of imminent failure. TRD