Georgia And Florida Now Account For One Third Of 2010 Bank Failures

Four More Banks Fail In Georgia, Florida and Arizona – 2010 Total Now 41

The four failed banks for March 26, 2010 had total assets of $1.2 billion and total deposits of $1.1 billion.  The cost to the FDIC Deposit Insurance Fund (DIF) for these latest banking failures  is estimated at $320  million.   The cost to the FDIC DIF for the 41 banking failures to date in 2010 now totals $6.5 billion.

The assets and deposits of all four failed banks were taken over by other institutions under purchase and assumption agreements with the FDIC.   As has been the case with almost all recent banking failures, the FDIC entered into a loss-share agreement with the acquiring banks to protect them from losses on the purchase of the failed banks’ assets.

Georgia and Florida Lead Nation In Banking Failures

Regulators closed 2 banks in Georgia and one each in Florida and Arizona.   Georgia and Florida now lead the nation in the number of banking collapses this year, with respective totals of 7 and 6.   The 13 banking failures in these two states now account for 32% of all banking failures in 2010 and resulted in estimated losses to the FDIC Insurance Deposit Fund (DIF) of $2.1 billion.

This year’s pattern of banking failures is similar to 2009 when 39 banks collapsed in Georgia and Florida, representing 27% of last year’s 140 banking failures.  Four states accounted for 55% of banking failures in 2009 as follows:

  • Georgia – 25
  • Illinois – 21
  • California – 17
  • Florida – 14

2010 Banking Failures 78% Higher Than 2009

At 41, the number of failed banks for 2010 exceeds the total of 23 at this same time last year – an increase of 78%.   There were a total of  2 banks with assets exceeding $1 billion that had failed as of the end of March 2009.   The comparable figures for 2010 show 8 failed banks with assets in excess of $1 billion including the largest failure of 2010, La Jolla Bank of California with $3.6 billion in assets.

Based on the large increase in the number of  Problem Banks, total banking failures and losses could potentially far exceed 2009’s totals.   As of the latest report released by the FDIC there were 702 problem banks at December 31, 2009 up from 252 at the end of  2008.  Total assets held by the troubled institutions is $402.8  billion, up from $159.0 billion at the end of 2008.  In 2009 a total of 26 failed banks had assets in excess of $1 billion as shown below.  (The largest banking failure by asset size was Colonial Bank which failed in August 2009 with $25.5 billion in assets.)

2009 Bank Failures                            Asset Range

11                                                    $1 – 2 Billion

5                                                      $2 – 4 Billion

6                                                      $4 – 10 Billion

4                                                      Greater than $10 billion

It is interesting to note that the total assets of failed banks in 2009 was $170 billion which exceeded the FDIC’s total of $159 billion in Problem Bank assets at year end 2008.   If this same relationship is experienced this year, failed bank assets in 2010 could approach the half trillion dollar mark based on the reported amount of $403 billion in Problem Bank assets at year end 2009.

McIntosh Commercial Bank, Carrollton, GA – Banking Failure # 38

McIntosh Bank is the second banking failure in Carrollton, GA this year, following the First National Bank of Georgia which failed in January.

McIntosh Commercial Bank, Carrollton, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with CharterBank, West Point, Georgia, to assume all of the deposits of McIntosh Commercial Bank.

As of December 31, 2009, McIntosh Commercial Bank had approximately $362.9 million in total assets and $343.3 million in total deposits.  The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $123.3 million. McIntosh Commercial Bank is the 38th FDIC-insured institution to fail in the nation this year, and the sixth in Georgia.

Key West  Bank, Key West FL – Banking Failure # 39

Key West Bank, Key West, Florida, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Centennial Bank, Conway, Arkansas, to assume all of the deposits of Key West Bank.

As of December 31, 2009, Key West Bank had approximately $88.0 million in total assets and $67.7 million in total deposits.  The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $23.1 million. Key West Bank is the 39th FDIC-insured institution to fail in the nation this year, and the sixth in Florida.

Unity National Bank, Cartersville, GA – Banking Failure # 40

Unity National Bank, Cartersville, Georgia, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of the Ozarks, Little Rock, Arkansas, to assume all of the deposits of Unity National Bank.

As of December 31, 2009, Unity National Bank had approximately $292.2 million in total assets and $264.3 million in total deposits.  The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $67.2 million.  Unity National Bank is the 40th FDIC-insured institution to fail in the nation this year, and the seventh in Georgia.

Desert Hills Bank, Phoenix, AZ – Banking Failure # 41

Desert Hills Bank, Phoenix, Arizona, was closed today by the Arizona Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with New York Community Bank, Westbury, New York, to assume all of the deposits of Desert Hills Bank.

As of December 31, 2009, Desert Hills Bank had approximately $496.6 million in total assets and $426.5 million in total deposits.  The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $106.7 million. Desert Hills Bank is the 41st FDIC-insured institution to fail in the nation this year, and the first in Arizona.


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