UP Ibalon Bicol: Worst bank closures: 106 banks shut down in 2009

Worst bank closures: 106 banks shut down in 2009

10/26/2009 | Posted by mesiamd | Edit Post

Clues of More Financial Hardtimes Ahead?

This year’s bank closures are the worst since 1992 during the savings and loan crisis. A total of 106 banks have been shut down by regulators of the Federal Deposit Insurance Corp (FDIC) this year. Because of the closures, it will cost FDIC about 25 billion dollars to shore up the banking system. The cost could reach $100 billion by year 2013. Just this weekend 7 banks have been shut down:

“1. 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.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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. “---ConsumersAffairs.com (10/24/09, Bosworth, M.)

Bank officials expect more closures to extend till 2012. Taking the option to close in order to avoid public panic, many smaller banks are hard hit by delinquency in loan payments, falling home values, and worsening unemployment of about 10%.

As a result of bank failures, the insurance fund of the FDIC is in danger of being depleted. Financial analysts believe the projected recovery between 2010 to 2013 will not be as robust as the optimism expressed by the Obama administration. (Photo Credit: Debtfree/ Daniloff) =0=

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Labels: banking, bankruptcy, closures, FDIC, financial, Totie Mesia

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Worst bank closures: 106 banks shut down in 2009

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