Aug 03 2009 Emmanuel Olaoye
Regulators have closed another five banks increasing the number of bank failures to 69 in 2009. The failures, which were spread across five states, are expected to cost the Federal Deposit Insurance Corporation's Deposit Insurance Fund approximately $911m.
Mutual Bank in Illinois was the largest bank to fail, with $1.6bn in assets and $1.6bn in deposits. It was closed by its state regulator and sold to United Central Bank under a purchase and assumption agreement. United Central will share in losses of approximately $1.3bn of Mutual's assets. Mutual's failure will cost the DIF approximately $696m.
First BankAmericano was closed by New Jersey Department of Banking after it received a cease-and-desist order from the FDIC and its state regulator in June. The bank, which had $166m in assets and deposits of $157m, was criticized on a number of safety and soundness-related issues including "operating with excessive levels of delinquent loans." Crown Bank in New Jersey will assume the failed bank's deposits, and purchase its assets.
The Office of Thrift Supervision closed the Peoples Community Bank in Ohio. The thrift had $705.8m in assets and total deposits of $598.2m. First Financial Bank will assume the bank's deposits and purchase its assets. Under an agreement with the FDIC, First Financial will also share in the losses of Peoples Community Bank.
Herring Bank in Texas acquired First State Bank after it was closed by the Oklahoma State Banking Department. First State had $103.4m in assets and $98.2m in deposits. Herring Bank will buy approximately $64.4m of First State's assets. The FDIC said that it would retain the remainder of the assets and dispose them at a later date.
In Florida, Stonegate Bank acquired Integrity Bank's deposits and approximately $52m of its assets. Integrity had approximately $119m in assets. The FDIC has said that it will dispose the rest of the assets in the future.
