Three Failed Banks Cost FDIC $1.4 Billion
Federal regulators shut down another three banks Friday as the US banking sector continues to absorb recession-related losses. All told, Friday’s failures will cost the Federal Deposit Insurance Corp.’s (FDIC) insurance fund an estimated $1.44bn and put a total $4.44bn in combined assets on the line for purchase or disposition. They mark the 30th, 31st, and 32nd failures so far in 2009. The FDIC created a bridge bank to take over the operations of Silverton Bank after the Office of the Comptroller of the Currency shut it down. Silverton Bank as of the time of closing held total assets of $4.1bn and total deposits of $3.3bn, all of which the FDIC expects is insured. The FDIC expects a $1.3bn cost to the insurance fund and contracted The Independent BankersBank to provide operational management of Silverton Bridge Bank. Read the FDIC’s statement on Silverton Bank. The Utah Department of Financial Institutions closed America West Bank. Cache Valley Bank agreed to purchase all of the failed bank’s deposits at a discount of $352,000 as well as $10.9m in assets. America West boasted as of year-end total assets worth $299.4m and total deposits worth $284.1m. Its failure will cost the insurance fund an estimated $119.4m. Read the FDIC’s statement on America West Bank. The New Jersey Department of Banking and Insurance closed Citizens Community Bank and named the FDIC receiver. Citizens Community Bank's sole office reopens today as a branch of North Jersey Community Bank, which assumes all of the failed bank deposits and approximately $11.5m in assets. Citizens Community as of year-end 08 boasted $45.1m in total assets, with $43.7m in total deposits. North Jersey Community paid a 0.67% premium for the failed bank’s deposits and also agreed to purchase $11.5m of the failed bank’s assets, the remainder of which the FDIC will retain for later disposition. Citizens Community’s failure will cost the Deposit Insurance Fund an estimated $18.1m. Read the FDIC’s statement on Citizens Community Bank. Write to Diana Golobay at email@example.com.