5 Failed Banks For July 31, 2009

Banking Failures – 69 and Counting

2009 has now seen a total of 44 more failed banks than occurred for all of 2008.  The latest banking closures by the FDIC bring total banking failures for 2009 to 69.  The latest five failed banks on July 31, 2009 had total assets of $2.7 billion and total losses to the FDIC Deposit Insurance Fund (DIF) are estimated at $912 million.

The latest four failed banks are as follows:

First State Bank of Altus, Altus, Oklahoma- Number 65

The FDIC, as receiver for First State Bank, entered into a purchase and assumption agreement with Herring Bank, Amarillo, Texas.  Herring Bank will assume all of the deposits of First State Bank.

First State Bank was a relatively small bank with only $98.2 million in deposits and $103.4 million in assets.  In a sign of the growing difficulty for the FDIC to find another bank to assume all of a failed banks assets, Herring Bank is purchasing only $64.4 million (62.3%) of failed First State Banks loans.   The balance of the assets not assumed by Herring Bank will be retained by the FDIC for disposition.

First State Bank of Altus is the first banking failure in Oklahoma since 1992.  The FDIC estimates that the cost to the DIF fund will be $25.2 million.

Integrity Bank, Jupiter, Florida -Number 66

The FDIC, as receiver for Integrity Bank, entered into a purchase and assumption agreement with Stonegate Bank, Fort Lauderdale, Florida.  Stonegate will assume all of the deposits of Integrity Bank and pay a premium of .20 percent to acquire the Integrity’s deposits.

As an indication of the horrendous default rate on Integrity’s loan portfolio, Stonegate is only assuming 44% or $52 million of Integrity’s assets.  The balance of Integrity’s assets will be retained by the FDIC for later disposal.   The FDIC has been encountering difficulties lately finding another bank that wants to assume the loan portfolio of failed banks.  Many banks are having enough of their own problems with nonperforming loans and do not wish to have further expensive loan recoveries, foreclosures or workouts on additional troubled loans.

Integrity Bank is the fourth banking failure in Florida this year.

The FDIC estimates the loss to the DIF fund will amount to $46 million or a very large 44% of failed bank Integrity’s assets.

Peoples Community Bank, West Chester, Ohio – Number 67

The FDIC entered into a purchase and assumption agreement with First National Bank, Hamilton, Ohio to assume all of the deposits of Peoples. First National will pay a premium of 1.5% on the assumed deposits of Peoples.

Peoples had total deposits of $598.2 million and total assets of $705.8 million.  First Bank will purchase essentially all of Peoples assets and enter into a loss-share transaction with the FDIC on $657.6 million of Peoples assets.

Peoples is the first bank to failure in Ohio this year.

The FDIC estimates the cost to the DIF fund on this banking failure will be $129.5 million.

First Bankamericano, Elizabeth, New Jersey – Number 68

The FDIC entered into a purchase and assumption agreement with Crown Bank, Brick, New Jersey to assume all of First Bankamericano’s deposits.

First Bankamericano had total deposits of $157 million and total assets of $166 million.  Crown Bank will purchase essentially all of First Bankamericano’s assets.

First Bankamericano is the second bank to fail in New Jersey this year.  The FDIC esimate the cost to the DIF fund will be $15 million.

Mutual Bank, Harvey, Illinois – Number 69

The FDIC entered into a purchase and assumption agreement with United Central Bank, Garland, Texas to assume all deposits of failed Mutual Bank.

Mutual Bank had total deposits of $1.6 billion and total assets of $1.6 billion.  United Central Bank will purchase essentially all of Mutual Bank’s assets, subject to a loss-share transaction with the FDIC on $1.3 billion of Mutual’s assets.

Mutual Bank is the thirteenth bank to fail in Illinois this year.

The FDIC estimates losses to the DIF fund at $696 million.

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