2 BANKS SHUT DOWN on September 24, 2010, 127 Banks fail in 2010!!

On Friday, September 24, 2010, TWO BANKS were CLOSED by U.S. regulators. The two failed institutions were located in Florida and Washington. This brings the total number of US Bank Failures to 127 so far in 2010, compared to 140 in 2009, 25 in 2008 and 3 in 2007. If bank failures continue at this pace, an estimate of over 165 banks will fail in 2010. These six bank failures had total ASSETS of approximately $437.4 MILLION and total deposits of approximately $409.7 MILLION. The Federal Deposit Insurance Corporation (“FDIC”) estimates the cost of the two bank closures to its Deposit Insurance Fund (“DIF”) will be approximately $104.7 million.

Although the economy is showing signs of a gradual recovery with the larger financial institutions stabilizing, tumbling home prices, soaring loan defaults in residential and commercial real estate and rising unemployment continue to take their toll on small banks. In the fourth quarter of 2009, the number of banks on the FDIC’s list of problem institutions grew to 702 from 552 in the third quarter of 2009. This is the highest number of problem institutions since the savings and loan crisis in the early 1990′s. Increasing loan losses on commercial real estate are expected to cause hundreds more bank failures in the next few years. The FDIC anticipates bank failures to cost over $100 billion over the next three years.

The TWO failed banks are:

  • Haven Trust Bank Florida – Ponte Vedra Beach, Florida, was closed by the Florida Office of Financial Regulation, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with First Southern Bank – Boca Raton, Florida, to assume all of the deposits of Haven Trust Bank Florida. As of June 30, 2010, Haven Trust Bank Florida had approximately $148.6 million in total assets and $133.6 million in total deposits. First Southern Bank did not pay the FDIC a premium for the deposits of Haven Trust Bank Florida. In addition to assuming all of the deposits of the failed bank, First Southern Bank agreed to purchase essentially all of the assets. The FDIC and First Southern Bank entered into a loss-share transaction on $127.3 million of Haven Trust Bank Florida’s assets. First Southern Bank will share in the losses on the asset pools covered under the loss-share agreement. The FDIC estimates that the cost to the DIF will be $31.9 million. Haven Trust Bank Florida is the 126th FDIC-insured institution to fail in the nation this year, and the twenty-fourth in Florida. The last FDIC-insured institution closed in the state was Horizon Bank, Bradenton, on September 10, 2010.

 

  • North County Bank – Arlington, Washington was closed by the Washington Department of Financial Institutions, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with Whidbey Island Bank – Coupeville, Washington, to assume all of the deposits of North County Bank. As of June 30, 2010, North County Bank had approximately $288.8 million in total assets and $276.1 million in total deposits. Whidbey Island Bank will pay the FDIC a premium of 2.0% to assume all of the deposits of North County Bank. In addition to assuming all of the deposits of the failed bank, Whidbey Island Bank agreed to purchase essentially all of the assets. The FDIC and Whidbey Island Bank entered into a loss-share transaction on $221.9 million of North County Bank’s assets. The FDIC estimates that the cost to the DIF will be $72.8 million. North County Bank is the 127th FDIC-insured institution to fail in the nation this year, and the ninth in Washington. The last FDIC-insured institution closed in the state was The Cowlitz Bank, Longview, on July 30, 2010.

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s 7,830 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.

(Source: Federal Deposit Insurance Corporation.)

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One Response to “2 BANKS SHUT DOWN on September 24, 2010, 127 Banks fail in 2010!!”

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