Another Friday, Another Failure (or Seven)

With the 4th of July holiday looming, Black Friday came early this week -- the FDIC shuttered seven banks at the close of business Thursday. Six of these failures were in Illinois, bringing the state's total to 12 since January 2008 and moving the Land of Lincoln into second place behind Georgia (14) in the failure race.

The story behind this week's Illinois failures is that all six banks were controlled by the same family and had purchased huge volumes of trust preferred securities. The failures were a result of the forced writedown of the investments and the family's inability to raise enough outside capital to prop up the banks. Three other banks owned by the same family are struggling to stay afloat.