Saturday, May 2, 2009

11 Bank Closures in 5 Weeks Cost $3 Billion

The FDIC has closed 11 banks in the past 5 weeks. In addition, the National Credit Union Administration closed one Florida Credit Union. The Eastern Financial Florida Credit Union, with 30 offices, was closed on April 24th. Space Coast Credit Union took over operations of the $1.6 billion in assets.

On April 10th, Cape Fear Bank of Wilmington, NC was closed. The eight branches were closed less than 2 months after the bank was hit with a cease and desist order from the FDIC. First Federal Savings and Loan of Charleston, SC will take over approximately $403 million in deposits. The cost to the FDIC is estimated at $131 million, or 33 cents on the dollar.

On April 10th, the FDIC also closed down New Frontier Bank of Greeley, CO. The bank had received a cease and desist order approximately 4 months prior to the closure. Depositors at the three locations in Greeley, Windsor and Longmont had approximately $1.5 billion in the bank and were given 30 days to transfer it to other banks. The estimated cost to the FDIC is $670 million or 45 cents on the dollar.

On Friday, April 17th, the five branches of American Sterling Bank of Sugar Creek, MO were closed. The three Kansas City area branches reopened Saturday as Metcalf Bank. The other two branches in Arizona and California reopened Monday, April 20th. American Sterling had deposits of $171.9 million and the closure is expected to cost the FDIC $42 million, or 24 cents per dollar deposited. American Sterling had recently been added as number 57 on my list of banks most likely to close in 2009.

On the same day, Great Basin Bank of Elko, NV was closed. The five branches were all acquired by Nevada State Bank which will manage the $221.4 million in deposits. Nevada State Bank also took over Silver State Bank last fall. Nevada State Bank is a wholly owned subsidiary of Zions Bancorporation. The estimated cost to the FDIC insurance fund is $42 million or 19 cents per dollar on deposit.

A week ago, American Southern Bank of Kennesaw, Georgia was closed own and its two branches were taken over by Bank of North Georgia. American Southern had been playing with hot brokered deposits. The FDIC will pay off $48.7 million in brokered deposits and Bank of North Georgia got the other $55.6 million in local deposits. The estimated cost to the insurance fund is $41.9 million, or 40 cents per dollar on deposit.

Also last week, Heritage Bank of Farmington Hills, MI closed. Level One Bank took over the three branches. Heritage Bank had $151.7 million in deposits including an estimated $50 million in brokered deposits. The estimated cost to the FDIC insurance fund is $71.3 million, a which is 47 cents per dollar on deposit.

Causing some confusion the "First Bank of Beverly Hills" was taken over by the FDIC. The First Bank of Beverly Hills doesn't actually have a branch in Beverly Hills, but is based in Calabasas, CA. There is a First Bank in Beverly Hills, but that is a branch of St. Louis based First Banks, Inc. which is trying very hard to reassure customers that they are still open. First Bank of Beverly Hills once did have an office in Beverly Hills, but the St. Louis bank bought it.

The Calabasas based bank had deposits of approximately $1 billion at their one location which has now been shuttered. The FDIC has cut checks to the depositors at a cost to the insurance fund of $394 million, or 39 cents per dollar on deposit.

And last week, First Bank of Idaho closed its seven branches just nine days after receiving a cease and desist order from the FDIC. and turned them over to US Bank. Three of the branches were operating under the name Bank of the Tetons. The seven branches will add to the 90 offices US Bank has in Idaho and 14 offices in Wyoming. First Bank of Idaho had $374 million in deposits on December 31, 2008 which had dwindled to $338 million in deposits at the time of the closure including $112.8 million in brokered deposits. William Ruberry, a spokesman for the Office of Thrift Supervision, told the Idaho Mountain Express that his agency closed First Bank of Idaho because the bank was losing $2.7 million per day and was in danger of running out of cash by the end of the month. The closure will cost the FDIC an estimated $191.2 million or 57 cents for every dollar deposited.

Yesterday, regulators shut down three more banks.

Silverton Bank of Atlanta, GA had $3.3 billion in deposits was a wholesale bank not a retail operation. It operated six regional offices. The FDIC set up a bridge bank, called Silverton Bridge Bank, NA to allow the 1,400 client banks in 44 states to continue operations with the least amount of disruption. The closure of Silverton bank is expected to cost the insurance fund $1.3 billion or 39 cents per dollar on deposit. TIB - The Independent BankersBank of Irving, TX will manage the bridge bank.

Citizens Community Bank, with one office in Ridgewood, NJ was also closed yesterday. The bank will reopen Monday as a branch of New Jersey Community Bank. The small Citizens Community bank with $43.7 million in deposits was number 2 on my list of Banks Most Likely to close in 2009. The estimated cost to the FDIC insurance fund is $18.1 million or 41 cents per dollar deposited.

Also closed yesterday was America West Bank of Layton, Utah. America West had three offices and deposits of $284.1 million. They were number 6 on my list. Cache Valley Bank will take over all of the deposits of America West. The cost to the insurance fund is estimated at $119.4 million or 42 cents per dollar on deposit.

In all, 11 banks were closed in the past 5 weeks and the FDIC had to pony up anywhere from 19 cents to 57 cents per dollar on deposit. The total is over $3 billion over the past 5 weeks. This compares with 5 bank closings during the month of March costing 11 to 36 cents per dollar deposited. Clearly, the condition of the banks is deteriorating more quickly than the regulators can close them down.

Seven of the top 10 banks on my list have now been shut down. To reflect the deteriorating condition, I am adding three more banks to my list. The new banks are from Utah, Michigan and Florida.

Here's my current list of the 50 62 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
60 Centennial Bank, Ogden, UT
61 Warren Bank, Warren, MI
62 Peoples First Community Bank, Panama City, FL

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