Regulators shutter 3 banks in Kansas, Missouri to bring US bank
failures this year to 132
Regulators on Friday seized three banks in Kansas and Missouri,
raising to 132 the number of U.S. banks that have been brought down
this year by mounting loan defaults and the sputtering economy.
The Federal Deposit Insurance Corp. on Friday took over the banks:
Premier Bank, based in Jefferson City, Mo., with about $1.18
billion in assets and $1.03 billion in deposits; WestBridge Bank
and Trust Co. of Chesterfield, Mo., with $91.5 million in assets
and $72.5 million in deposits; and Security Savings Bank, based in
Olathe, Kan., with $508.4 million in assets and $397 million in
Simmons First National Bank, based in Pine Bluff, Ark., agreed to
assume the assets and deposits of Security Savings Bank. Midland
States Bank, based in Effinghim, Ill., is acquiring the assets and
deposits of WestBridge Bank and Trust. Providence Bank, based in
Columbia, Mo., is assuming the deposits and $657.9 million of
Premier Bank's assets. The FDIC will retain the rest for eventual
In addition, the FDIC and Simmons First National Bank agreed to
share losses on $334.2 million of Security Savings Bank's loans and
other assets. Midland States Bank agreed to share losses with the
FDIC on $72.6 million of WestBridge Bank and Trust's assets, while
the FDIC and Providence Bank are sharing losses on $408.7 million
of Premier Bank's assets.
The failure of Premier Bank is expected to cost the deposit
insurance fund $406.9 million; the failure of WestBridge Bank and
Trust is expected to cost $18.7 million; that of Security Savings
Bank, $82.2 million.
With 132 closures nationwide so far this year, the pace of bank
failures exceeds that of 2009, which was already a brisk year for
shutdowns with 140. By this time last year, regulators had closed
The pace has accelerated as banks' losses mount on loans made for
commercial property and development. Many companies have shut down
in the recession, vacating shopping malls and office buildings
financed by the loans. That has brought delinquent loan payments
and defaults by commercial developers.
The 2009 total of bank failures was the highest annual tally since
1992, at the height of the savings and loan crisis. The 2009
failures cost the insurance fund more than $30 billion. Twenty-five
banks failed in 2008, the year the financial crisis struck with
force; only three succumbed in 2007.
The growing bank failures have sapped billions of dollars out of
the deposit insurance fund. It fell into the red last year, and its
deficit stood at $20.7 billion as of June 30.
The number of banks on the FDIC's confidential "problem" list
jumped to 829 in the second quarter from 775 three months earlier,
even as the industry as a whole had its best quarter since 2007,
making $21.6 billion in net income. Banks with more than $10
billion in assets -- only 1.3 percent of the industry -- accounted
for $19.9 billion of the total earnings.
The FDIC expects the cost of resolving failed banks to total around
$60 billion from 2010 through 2014.
The agency mandated last year that banks prepay about $45 billion
in premiums, for 2010 through 2012, to replenish the insurance
Depositors' money -- insured up to $250,000 per account -- is not
at risk, with the FDIC backed by the government. That insurance cap
was made permanent in the financial overhaul law enacted in
Written by: Marcy Gordon, AP Business