The FDIC said today that Ohio's Superintendent of Financial Institutions closed the Miami Valley Bank of Lakeview, a small local bank with $86.7 million in total assets and $76 million in total deposits as of October 1, 2007. From the press release:
The Citizens Banking Company has agreed to assume $62 million of the failed bank's insured deposits for a two percent premium. At the time of closing, Miami Valley had approximately $14 million in 269 deposit accounts that exceeded the federal deposit insurance limit. While these customers will have access to their insured deposits, they will become creditors of the receivership for the amount of their uninsured funds. The FDIC will retain all of Miami Valley's assets for later disposition.
American Banker reports that FDIC spokesperson David Barr acknowledged the bank's failure was due in part to troubles in the subprime mortgage market:
"Miami Valley experienced a significant deterioration in asset quality from loans that were acquired from two mortgage companies, and this included some subprime mortgage loans," said David Barr, an FDIC spokesman ... "Liquidity became an issue and accelerated the problems at the bank," Mr. Barr said. "It is possible that rumors and word of mouth contributed to the sudden withdrawal of funds which exacerbated the bank's problems. The institution has been troubled for some time, and the withdrawals accelerated the closing."
Subscribers can read the full story. It's worth noting that regulators went out of their way last week to characterize the failure of NetBank, Inc. as an "isolated situation" with respect to mortgage exposure -- and it only took one week for that statement to be called into at least some question, even if we're talking about a significantly smaller bank.