Five Bank Closings in March

The FDIC closed five banks during the month of March. Plus there were two credit unions that were taken over by the National Credit Union Association.

Let's start with the credit unions. The U.S. Central Federal Credit Union of Lenexa, Kansas was placed into conservatorship on March 20th. U.S. Central was a corporate credit union with $34 billion in assets and just 26 corporate members. They did not have any retail members.

The Western Corporate (WesCorp) Federal Credit Union of San Dimas, California was placed into conservatorship on the same day. WesCorp did have retail customers. They had approximately 1,100 members and approximately $23 billion in assets.

Among the banks, the FDIC closed down Freedom Bank of Georgia, of Commerce, Georgia on March 6th. The bank was a late addition to my list in February, coming in at number 56. Freedom Bank had deposits of $161 million at four branches. They reopened Monday, March 9th as branches of Northeast Georgia Bank of Lavonia, Georgia. The estimated cost to the FDIC is $36.2 million, or 22 cents for each dollar on deposit.

Two weeks later, the FDIC closed down another Georgia bank, FirstCity Bank of Stockbridge. The FDIC was unable to find a buyer for FirstCity which had deposits of $278 million at three branches. Checks were mailed out to the depositors at an estimated cost to the FDIC of $100 million or 36 cents for each dollar on deposit. FirstCity was number 13 on my list of banks most likely to close in 2009.

The FDIC also closed Colorado National Bank of Colorado Springs. Colorado National's four branches reopened Monday, March 23rd as branches of Herring Bank headquartered in Amarillo, Texas. The cost to the FDIC insurance fund on this closing is estimated at $9 million on $82.7 million of deposits or only 11 cents per dollar on deposit.

The same day, the FDIC closed Teambank, NA of Paola, Kansas. Teambank had 17 branch offices and $474 million in deposits. The branches were taken over by Great Southern Bank of Springfield, Missouri. The FDIC estimates a cost to the insurance fund of $98 million or 21 cents per dollar on deposit.

A week later, the FDIC closed a third Georgia bank, Omni National Bank of Atlanta. Omni was number 37 on my list. Like FirstCity, the FDIC was unable to find a buyer for the bank. But I suspect the FDIC has been getting a number of complaints about bounced checks from the FirstCity shutdown. So this time, they entered into an agreement with SunTrust Bank to run the six former Omni branches for 30 days to give customers time to close their checking accounts in an orderly manner. The FDIC will be probably be doing more closings like this in the future. Omni had $796.8 million in deposits and the estimated cost to the insurance fund is $290 million or 36 cents per dollar on deposit.

As you can see, despite quickening pace that resulted in the closing of 21 banks in the first quarter of 2009, the FDIC is still not able to keep up with the banking crisis. The closings are getting progressively more expensive per dollar on deposit. Many more banks will need to be closed before the year is over.

As I've reviewed my list of the banks most likely to close in 2009, I've spotted a few errors. Namely, three banks on my original list had already failed in November and December of 2008. So I'm dropping those from the list.

I'm also expanding the list to include some banks that have gotten significantly worse in recent months. My additions to the list include another bank in Georgia, two in Florida, and one each in Indiana, Missouri and New York.

Here's my current list of the 50 59 Banks Most Likely to Close in 2009.

1 Magnet Bank, Salt Lake City, UT
2 Citizens Community Bank, Ridgewood, NJ
3 FirstBank Financial Services, McDonough, GA
4 Westsound Bank, Bremerton, WA
5 Suburban Federal Savings Bank, Crofton, MD
6 America West Bank, Layton, UT
7 Silver Falls Bank, Silverton, OR
8 Ocala National Bank, Ocala, FL
9 Sun Security Bank, Ellington, MO
10 Eastern Savings Bank, FSB, Hunt Valley, MD
11 Alliance Bank, Culver City, CA
12 FirstCity Bank, Stockbridge, GA
13 Chestatee State Bank, Dawsonville, GA
14 First Security National Bank, Norcross, GA
15 Ocean Bank, Miami, FL
16 Family Bank and Trust Co., Palos Hills, IL
17 Southern Community Bank, Fayetteville, GA
18 BankCherokee, Saint Paul, MN
19 First Tuskegee Bank, Tuskegee, AL
20 Federal Trust Bank, Sanford, FL
21 Pinnacle Bank, Beaverton, OR
22 Lake Country Community Bank, Morristown, MN
23 Mesa Bank, Mesa, AZ
24 Bank of Wyoming, Thermopolis, WY
25 1st American State Bank of Minnesota, Hancock, MN
26 First State Bank of Altus, Altus, OK
27 EvaBank, Eva, AL
28 Strategic Capital Bank, Champaign, IL
29 Ebank, Atlanta, GA
30 Polk County Bank, Johnston, IA
31 Parkway Bank, Rogers, AR
32 Security Bank of Gwinnett County, Suwanee, GA
33 State Bank of Park Rapids, Park Rapids, MN
34 Herrin Security Bank, Herrin, IL
35 Omni National Bank, Atlanta, GA
36 Northpointe Bank, Grand Rapids, MI
37 Towne Bank of Arizona, Mesa, AZ
38 Timberland Bank, El Dorado, AR
39 Blue Ridge Savings Bank, Inc., Asheville, NC
40 First Piedmont Bank, Winder, GA
41 Select Bank, Grand Rapids, MI
42 Oxford Bank, Oxford, MI
43 Security Bank of North Metro, Woodstock, GA
44 MetroPacific Bank, Irvine, CA
45 Earthstar Bank, Southampton, PA
46 Neighborhood Community Bank, Newnan, GA
47 The Home Savings and Loan Company, Youngstown, OH
48 Heritage Community Bank, Glenwood, IL
49 Vineyard Bank, NA, Rancho Cucamonga, CA
50 Community Bank of Lemont, Lemont, IL
51 Mainstreet Bank, Forest Lake, MN
52 Mutual Bank, Harvey, IL
53 Freedom Bank of Georgia, Commerce, GA
54 Newton County Loan & Savings FSB, Goodland, IN
55 Riverside Bank, Cape Coral, FL
56 BankUnited, Coral Gables, FL
57 American Sterling Bank, Sugar Creek, MO
58 The Park Avenue Bank, New York, NY
59 First Commerce Community Bank, Douglasville, GA