Regulators shut down banks in Florida, Michigan, So Carolina; 96
US bank failures this year Regulators on Friday shut down three
banks in Florida, two in South Carolina and one in Michigan,
bringing to 96 the number of U.S. banks to succumb this year to the
recession and mounting loan defaults. The Federal Deposit Insurance
Corp. on Friday took over the banks: Woodlands Bank, based in
Bluffton, S.C., with $376.2 million in assets; First National Bank
of the South, based in Spartanburg, S.C., with $682 million in
assets; and Mainstreet Savings Bank of Hastings, Mich., with $97.4
million in assets. The FDIC also seized Miami-based Metro Bank of
Dade County, with assets of $442.3 million; Turnberry Bank of
Aventura, Fla., assets of $263.9 million; and Olde Cypress
Community Bank of Clewiston, Fla., assets of $168.7 million.
Miami-based NAFH National Bank, a newly chartered subsidiary of
North American Financial Holdings Inc. of Charlotte, N.C., agreed
to assume the assets and deposits of First National Bank of the
South, Metro Bank of Dade County and Turnberry Bank. North American
Financial Holdings said Friday the acquisitions give it "a strong
presence in attractive banking markets," with 10 branches in the
Miami area and 13 throughout South Carolina. Bank of the Ozarks,
based in Little Rock, Ark., agreed to assume the assets and
deposits of Woodlands Bank, while CenterState Bank of Florida is
assuming the assets and deposits of Olde Cypress Community Bank;
and Commercial Bank, based in Alma, Mich., is acquiring the assets
and deposits of Mainstreet Savings Bank. The failure of Woodlands
Bank is estimated to cost the deposit insurance fund $115 million.
Estimated costs for the others are: First National Bank of the
South, $74.9 million; Mainstreet Savings Bank, $11.4 million; Metro
Bank of Dade County, $67.6 million; Turnberry Bank, $34.4 million;
and Olde Cypress Community Bank, $31.5 million. With 96 closures
nationwide so far this year, the pace of bank failures far
outstrips that of 2009, which was already a brisk year for
shutdowns. By this time last year, regulators had closed 57 banks.
The pace has accelerated as banks' losses mount on loans made for
commercial property and development. The number of bank failures is
expected to peak this year and be slightly higher than the 140 that
fell in 2009. That 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, and only
three succumbed in 2007. As losses have mounted on loans made for
commercial property and development, 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 March 31. The number of banks on the FDIC's confidential
"problem" list jumped to 775 in the first quarter from 702 three
months earlier, even as the industry as a whole had its best
quarter in two years. A majority of institutions posted profit
gains in the January-March quarter. But many small and midsized
banks are likely to continue to suffer distress in the coming
months and years, especially from soured loans for office buildings
and development projects. 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
fund. Depositors' money -- insured up to $250,000 per account -- is
not at risk, with the FDIC backed by the government. Written by:
Marcy Gordon, AP Business Writer, On Friday July 16, 2010
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