Regulators shut banks in 5 states
WASHINGTON — Regulators on Friday shut down seven banks in six states, including Independent Bankers’ Bank, based in Springfield, Ill., and two large banks in California.
Regulators so far this year have shut down 140 banks.
The Federal Deposit Insurance Corp. on Friday took over the seven newly shuttered banks.
Independent Bankers’ Bank — a sort of wholesale bank that provided services to 450 client banks in four states — closed with $585.5 million in assets and $511.5 million in deposits.
Regulators also shuttered First Federal Bank of California, based in Santa Monica, with $6.1 billion in assets and $4.5 billion in deposits, as was as Imperial Capital Bank of La Jolla, Calif., with about $4 billion in assets and $2.8 billion in deposits.
California was one of the states hardest hit by the real estate market meltdown and many banks there have suffered under the weight of soured mortgage loans. First Federal and Imperial Capital bring to 17 the number of California banks to fail this year.
The other banks shuttered Friday were: Atlanta-based RockBridge Commercial Bank, with $294 million in assets and $291.7 million in deposits; New South Federal Savings Bank, based in Irondale, Ala., with $1.5 billion in assets and $1.2 billion in deposits; Citizens State Bank of New Baltimore, Mich., with $168.6 million in assets and $157.1 million in deposits; and Peoples First Community Bank of Panama City, Fla., with $1.8 billion in assets and $1.7 billion in deposits.
OneWest Bank of Pasadena, Calif., agreed to buy all of the deposits and essentially all of the assets of First Federal Bank. All 39 of its branches will reopen on Saturday as branches of OneWest.
Los Angeles-based City National Bank has agreed to acquire all of the deposits of Imperial Capital, as well as $3.3 billion of the failed bank’s assets poor credit personal loans.
Beal Bank, based in Plano, Texas, agreed to assume the assets and deposits of New South Federal Savings Bank, which only had one branch.
Hancock Bank, based in Gulfport, Miss., agreed to assume the deposits and about $1.6 billion of the loans and other assets of Peoples First Community Bank.
For Independent Bankers’ Bank, the FDIC set up a temporary "bridge bank," which the agency will operate as it continues to seek a buyer.
The FDIC also set up a "bridge bank" for Citizens State Bank, which will continue to operate for about 45 days to allow customers access to their deposits and open accounts at other banks. It will be operated by Huntington National Bank of Columbus, Ohio, under a contract with the FDIC.
The FDIC was unable to find a buyer for RockBridge Commercial Bank, so checks covering insured accounts will be mailed to retail depositors, the agency said. RockBridge Commercial had about $2.1 million in deposits that exceeded the $250,000 per-account insured limit, an estimate likely to change after more information is gathered from customers, the agency said.
As the economy has slumped, with unemployment rising, home prices tumbling and loan defaults soaring, bank failures have accelerated around the country.
The 140 bank failures are the most in a year since 1992 at the height of the savings-and-loan crisis. They have cost the government-backed deposit insurance fund — which has fallen into the red — more than $30 billion so far this year. The failures compare with 25 last year and three in 2007.
The FDIC expects the cost of bank failures to grow to about $100 billion over the next four years.
Filed under: business by Guru