A total of 140 banks have failed year to date and FDIC Chairman Sheila Bair is adding staff, prepared for even more failures next year.



Please consider Seven U.S. Banks Are Seized, Raising Year’s Failure Toll to 140



Seven U.S. banks were seized by regulators today, bringing this year’s total of failed lenders to 140 as financial companies are tested by the recession and the Federal Deposit Insurance Corp. anticipates more shutdowns.



Banks with $14.4 billion in total assets were closed in six U.S. states, the FDIC said in statements on its Web site. The agency is overseeing the dissolution of banks at the fastest pace in 17 years.



Earlier this week, the FDIC boosted its 2010 budget by 56 percent to $4 billion to manage further shutdowns. The total budget will increase from $2.6 billion and the set-aside for bank failures doubles to $2.5 billion over this year, according to a proposal approved by the FDIC board. The agency staff will increase to 8,653 next year from 7,010 this year.



The budget “will ensure that we are prepared to handle an ever-larger number of bank failures next year, if that becomes necessary,” FDIC Chairman Sheila Bair said in a statement. Today’s bank closings will cost the agency about $1.8 billion, according to the FDIC statements.



U.S. lenders are buckling under the weight of loans tied to commercial real estate, which is plummeting in value. Prices have dropped 43 percent from their peak in October 2007, Moody’s Investors Service said last month.

Assets at Banks whose ALLL exceeds their Nonperforming Loans

For each size category, the sum of all assets held by banks where this ratio is greater than one is divided by the sum all assets held by banks in the class.

In other words, banks whose allowances are negative are excluded from the chart.

Correction