FDIC Friday
February 20th, 2010Via: AP:
Regulators shut four banks from California to Florida on Friday, boosting to 20 the number of U.S. bank failures this year following the 140 closures last year in the worst financial climate in decades.
The Federal Deposit Insurance Corp. took over La Jolla Bank, FSB, in La Jolla, Calif. The bank had 10 branches and about $3.6 billion in assets and $2.8 billion in deposits.
Also seized was George Washington Savings Bank in Orland Park, Ill. It had four branches and about $412.8 million in assets and $397 million in deposits.
The FDIC said OneWest Bank in Pasadena, Calif., agreed to assume all deposits and essentially all assets of La Jolla Bank. The takeover is expected to cost the deposit insurance fund an estimated $882.3 million.
The FDIC and OneWest will share losses on about $3.3 billion of the failed bank’s loans and other assets.
Meanwhile, FirstMerit Bank, National Association of Akron, Ohio, agreed to take over deposits at George Washington Savings Bank. FirstMerit is also taking over essentially all the assets. For George Washington, the FDIC predicts the takeover will cost the insurance fund $141.4 million.
The loss-sharing agreement for George Washington covers $324.2 million in assets.
The other seized banks were smaller and located in Florida and Texas. They were Marco Community Bank, with a single office on Marco Island, a wealthy barrier island near Naples on Florida’s Gulf Coast, and La Coste National Bank of La Coste, Texas.
Marco Community Bank had about $119.6 million in assets and $117.1 million in deposits. Mutual of Omaha Bank, a division of the big insurance company Mutual of Omaha, agreed to assume the assets and deposits of Marco Community Bank.
The failure of Marco Community Bank will cost the deposit insurance fund an estimated $38.1 million.
In addition, the FDIC and Mutual of Omaha Bank, which is based in Omaha, Neb., agreed to share losses on $104.8 million of the failed bank’s loans and other assets.
Florida is among the states with the highest concentration of bank failures and where the meltdown in the real estate market brought an avalanche of soured mortgage loans. Last year saw the failure of 14 banks in the state. Also high on the list are California, Georgia and Illinois.
La Coste National Bank had a single branch and $53.9 million in assets. Deposits totaled $49.3 million.
Community National Bank of Hondo, Texas, agreed to buy the deposits and assets of La Coste National Bank — whose failure is expected to cost the insurance fund $3.7 million.
I wonder if we’ll start to see an increase in the number of bank failures in the Mid-West once the new FDIC center there opens, as suggested by the previous FDIC article.
Its crazy to think that there are undercapitalized banks in operation (which the taxpayers are on the hook for)simply because the FDIC doesn’t have enough boots on the ground in any given area to properly handle the caseload.
What’s just as worrying is what happens when the number of legitimate closures is exhausted and there are at least 1500 people around the country whose livlihoods depend on banks being closed and parceled out.
To chase provokes flight, which is obvious. What’s not so obvious is sometimes flight provokes chase.
@Zenc: interesting comments; good food for thought and illuminating. there are aspects in the dynamics of this stuff that i was clueless about and didn’t even realize it until your comments. and your hypotheticals were pithy and reasonable and pertinent. thanks all around.