FDIC Handles Seven Bank Closings

The number of bank closings in 2009 hit 140 last week, as seven institutions insured by the Federal Deposit Insurance Corp. (FDIC) were shuttered Friday.

The FDIC, acting as receiver, paid out the insured deposits of one of the banks, created a temporary deposit insurance bank for another, and created a ‘bridge bank’ to handle the operations of yet another. The assets and deposits of four of the banks were absorbed by other institutions.

The breakdown is as follows:

  • The Georgia Department of Banking and Finance closed Atlanta-based RockBridge Commercial Bank Atlanta, and the FDIC approved the payout of RockBridge's insured deposits. The FDIC says it was unable to find another institution to take over RockBridge's operations. The estimated cost of to the FDIC's Deposit Insurance Fund (DIF) is approximately $124.2 million.
  • The Michigan Office of Financial and Insurance Regulation closed New Baltimore, Mich.-based Citizens State Bank. The FDIC created the Deposit Insurance National Bank of New Baltimore (DINB), which will remain open for about 45 days to allow depositors access to their deposits and time to open accounts at other institutions. Columbus, Ohio-based Huntington National bank will provide operational management of the DINB. Citizens State Bank's failure will cost the DIF about $76.6 million.
  • The Office of Thrift Supervision (OTS) closed Peoples First Community Bank in Panama City, Fla., and Gulfport, Miss.-based Hancock Bank agreed to buy $1.6 billion of the bank's assets. The FDIC and Hancock Bank entered into a loss-share transaction on about $1.4 billion of the assets. The estimated cost to the DIF is $556.7 million.
  • New South Federal Savings Bank, based in Irondale, Ala., was closed by the OTS, and its deposits and "essentially all" of its assets were acquired by Plano, Texas-based Beal Bank. The FDIC and Beal Bank entered into a loss-share transaction on $1.2 billion of New South Federal Savings Bank's assets. The FDIC estimates that the cost to the DIF will be $212.3 million.
  • State regulators in Illinois closed Springfield, Ill.-headquartered commercial bank Independent Bankers' Bank. The FDIC created a bridge bank, Independent Bankers' Bank Bridge Bank NA, to take over the operations. Independent Bankers' Bank had approximately 450 client banks in four states and operated one regional office. It provided a variety of services for its clients, including clearing accounts, investments, consulting, purchasing loans and selling loan participations. Its closing will cost the DIF about $68.4 million.
  • Imperial Capital Bank of La Jolla, Calif., was closed by the California Department of Financial Institutions, and its deposits and assets were acquired by Los Angeles-based City National Bank. City National Bank agreed to purchase $3.3 billion of the failed bank's assets, $2.5 billion of which are subject to a loss-share agreement between City National Bank and the FDIC. The closing will cost the DIF about $619.2 million.
  • The OTS also closed Santa Moncia, Calif.-based First Federal Bank of California. The FDIC entered into a purchase and assumption agreement with Pasadena, Calif.-based OneWest Bank FSB. The FDIC and OneWest entered into a loss-share transaction on $5.3 billion of First Federal Bank of California's assets. The FDIC estimates that the cost to the DIF will be $146.3 million.

SOURCE: Federal Deposit Insurance Corp.


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