By Martin H. Bosworth
ConsumerAffairs.com
October 24, 2009
The number of bank closings for 2009 has officially passed the milestone of 100 today, hitting a new total of 106. 2009's bank failures are the most since 1992, during the savings-and-loan crisis, and will cost the Federal Deposit Insurance Corporation (FDIC) $25 billion to shore up.
Regulators working with the FDIC, the Office of Thrift Supervision (OTS), the Comptroller of the Currency (OCC), and state officials closed three banks in Florida, one in Georgia, one in Illinois, one in Minnesota, and one in Wisconsin. The seven banks closed today include:
• Flagship National Bank, Bradenton, Florida. The FDIC entered into a purchase and assumption agreement with First Federal Bank of Florida, Lake City, Florida, to assume all of the deposits of Flagship National Bank. As of August 31, 2009, Flagship National Bank had total assets of $190 million and total deposits of approximately $175 million. In addition to assuming all of the deposits of the failed bank, First Federal Bank of Florida agreed to purchase essentially all of the assets. Total cost to the FDIC: $59 million.
• Hillcrest Bank Florida, Naples, Florida, was closed by the Florida Office of Financial Regulation. The FDIC entered into a purchase and assumption agreement with Stonegate Bank, Fort Lauderdale, Florida, to assume all of the deposits of Hillcrest Bank Florida. As of October 1, 2009 , Hillcrest Bank Florida had total assets of $83 million and total deposits of approximately $84 million. Stonegate Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of Hillcrest Bank Florida. In addition to assuming all of the deposits of the failed bank, Stonegate Bank agreed to purchase $28 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition. Total cost to the FDIC: $45 million.
• Partners Bank, Naples, Florida, was closed by the Office of Thrift Supervision. The FDIC entered into a purchase and assumption agreement with Stonegate Bank, Fort Lauderdale, Florida, to assume all of the deposits of Partners Bank. As of September 30, 2009, Partners Bank had total assets of $65.5 million and total deposits of approximately $64.9 million. Total cost to the FDIC: $28.6 million.
• American United Bank of Lawrenceville, Georgia, whose deposits will be assumed by Ameris Bank, of Moultrie, Georgia. As of August 11, 2009, American United Bank had total assets of $111 million and total deposits of approximately $101 million. Ameris Bank will pay the FDIC a premium of 1.02 percent to assume all of the deposits of American United Bank. In addition to assuming all of the deposits of the failed bank, Ameris Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $44 million.
• First Dupage Bank, Westmont, Illinois, was closed today by the Illinois Department of Financial & Professional Regulation -- Division of Banking. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Midwest Bank, Itasca, Illinois, to assume all of the deposits of First Dupage Bank. The sole branch of First Dupage Bank will reopen on Saturday as a branch of First Midwest Bank. As of July 31, 2009, First Dupage Bank had total assets of $279 million and total deposits of approximately $254 million. In addition to assuming all of the deposits of the failed bank, First Midwest Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $59 million.
• Riverview Community Bank, Otsego, Minnesota, was closed today by the Minnesota Department of Commerce. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Central Bank, Stillwater, Minnesota, to assume all of the deposits of Riverview Community Bank. As of August 31, 2009, Riverview Community Bank had total assets of $108 million and total deposits of approximately $80 million. In addition to assuming all of the deposits of the failed bank, Central Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $20 million.
• Bank of Elmwood, Racine, Wisconsin, was closed today by the Wisconsin Department of Financial Institutions. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Tri City National Bank, Oak Creek, Wisconsin, to assume all of the deposits of Bank of Elmwood. Bank of Elmwood had total assets of $327.4 million and total deposits of approximately $273.2 million. Tri City National Bank did not pay the FDIC a premium for the deposits of Bank of Elmwood. In addition to assuming all of the deposits of the failed bank, Tri City National Bank agreed to purchase essentially all of the assets. Total cost to the FDIC: $101.1 million.
Worst still to come?
While the world's largest banks were able to avail themselves of bailout money provided at taxpayer expense, many regional and community banks were left to fend for themselves. Crushed under the weight of delinquent loans due to unemployment and crashing home values, and overextended with too much easy credit, smaller local banks have simply been unable to cover their assets.
The cascading bank failures have also severely depleted the FDIC's deposit insurance fund, which chairwoman Sheila Bair said would be in the red through 2012 at least. She also predicted that the U.S. would see more bank failures through the remainder of 2009 and into 2010.
