3 BANKS SHUT DOWN on October 15, 2010, 132 Banks fail in 2010!!

On Friday, October 15, 2010, THREE BANKS were CLOSED by U.S. regulators. The three failed institutions were located in Missouri and Kansas. This brings the total number of US Bank Failures to 132 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 167 banks will fail in 2010. These three bank failures had total ASSETS of approximately $1.8 BILLION and total deposits of approximately $1.5 BILLION. The Federal Deposit Insurance Corporation (“FDIC”) estimates the cost of the three bank closures to its Deposit Insurance Fund (“DIF”) will be approximately $507.8 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 THREE failed banks are:

  • Security Savings Bank, F.S.B. – Olathe, Kansas, was closed by the Office of Thrift Supervision, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with Simmons First National Bank, Pine Bluff, Arkansas, to assume all of the deposits of Security Savings Bank, F.S.B. As of June 30, 2010, Security Savings Bank, F.S.B. had approximately $508.4 million in total assets and $397.0 million in total deposits. Simmons First National Bank did not pay the FDIC a premium for the deposits of Security Savings Bank, F.S.B. In addition to assuming all of the deposits of the failed bank, Simmons First National Bank agreed to purchase essentially all of the assets. The FDIC and Simmons First National Bank entered into a loss-share transaction on $334.2 million of Security Savings Bank, F.S.B.’s assets. Simmons First National 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 $82.2 million. Security Savings Bank, F.S.B. is the 130th FDIC-insured institution to fail in the nation this year, and the second in Kansas. The last FDIC-insured institution closed in the state was Thunder Bank, Sylvan Grove, on July 23, 2010.

 

  • WestBridge Bank and Trust Company – Chesterfield, Missouri, was closed by the Missouri Division of Finance, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with Midland States Bank – Effingham, Illinois, to assume all of the deposits of WestBridge Bank and Trust Company. As of June 30, 2010, WestBridge Bank and Trust Company had approximately $91.5 million in total assets and $72.5 million in total deposits. Midland States Bank did not pay the FDIC a premium for the deposits of WestBridge Bank and Trust Company. In addition to assuming all of the deposits of the failed bank, Midland States Bank agreed to purchase essentially all of the assets. The FDIC and Midland States Bank entered into a loss-share transaction on $72.6 million of WestBridge Bank and Trust Company’s assets. Midland States 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 $18.7 million. WestBridge Bank and Trust Company is the 131st FDIC-insured institution to fail in the nation this year, and the fifth in Missouri. The last FDIC-insured institution closed in the state was Southwest Community Bank, Springfield, on May 14, 2010.

 

  • Premier Bank – Jefferson City, Missouri was closed by the Missouri Division of Finance, which appointed the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with Providence Bank – Columbia, Missouri, to assume all of the deposits of Premier Bank, except certain brokered deposits. As of June 30, 2010, Premier Bank had approximately $1.18 billion in total assets and $1.03 billion in total deposits. Providence Bank did not pay the FDIC a premium for the deposits of Premier Bank. In addition to assuming all of the deposits of the failed bank, Providence Bank agreed to purchase approximately $657.9 million of the failed bank’s assets. The FDIC will retain the balance of the assets for later disposition. The FDIC and Providence Bank entered into a loss-share transaction on $408.7 million of Premier Bank’s assets. Providence 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 $406.9 million. Premier Bank is the 132nd FDIC-insured institution to fail in the nation this year, and the sixth in Missouri. The last FDIC-insured institution closed in the state was WestBridge Bank and Trust, Chesterfield on October 15, 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 “3 BANKS SHUT DOWN on October 15, 2010, 132 Banks fail in 2010!!”

  • Jim Rowe says:

    The sooner problems with troubled banks are settled the better it will be for the economy. Delays in solving all individual economic and business problems will only exacerbate the problems of the whole economy.

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