Thread: FDIC closes 5 more banks; 89 total in '09

FDIC closes 5 more banks; 89 total in '09

ASSOCIATED PRESS
2:00 a.m. September 5, 2009

NEW YORK — Regulators yesterday shut down banks in Missouri, Illinois, Iowa and Arizona, pushing to 89 the number of banks that have failed this year under the weight of the soured economy and rising loan defaults.

The Federal Deposit Insurance Corp. took over First Bank of Kansas City, based in Kansas City, Mo., with $16 million in assets and $15 million in deposits and shut down Sioux City, Iowa-based Vantus Bank with $458 million in assets and $368 million in deposits.

The FDIC seized two banks in Illinois: Oak Forest-based InBank, with $212 million in assets and $199 million in deposits, and Platinum Community Bank in Rolling Meadows, which had $346 million in assets and $305 million in deposits.

First State Bank in Flagstaff, Ariz. was also shuttered by the FDIC. The bank had $105 million in assets and deposits totaling $95 million.

The agency said First Bank of Kansas City's deposits will be assumed by Great American Bank based in De Soto, Kan. Its sole branch will reopen today as a branch of Great American Bank.

Vantus Bank's deposits will be assumed by Great Southern Bank in Springfield, Mo. All 15 of Vantus Bank's branches will reopen as branches of Great Southern Bank. In addition, the FDIC agreed to share with Great Southern Bank losses on about $338 million of Vantus Bank's assets.

Nearly all of InBank's deposits will be assumed by MB Financial Bank in Chicago. Some brokered deposits will not be assumed by MB Financial Bank. InBank's three branches will reopen as branches of MB Financial Bank.

The FDIC did not find another bank to take over Platinum Community Bank's branches or deposits. Instead, the FDIC will pay out insured deposits at Platinum Community Bank. Government direct deposits will be handled by MB Financial Bank's Palatine, Ill., branch.

The FDIC insures accounts up to $250,000. Depositors with accounts larger than $250,000 will be able to receive details about whether their accounts are fully covered beginning Tuesday by checking the FDIC's Web site.

First State Bank's deposits will be acquired by Sunwest Bank in Tustin. First State Bank's six branches will reopen as branches of Sunwest Bank.

The failure of First Bank of Kansas City is expected to cost the FDIC's deposit insurance fund $6 million. InBank's failure will cost the insurance fund $66 million, while Vantus Bank's failure will cost the fund $168 million.

Platinum Community Bank's failure will cost the fund about $114 million. First State Bank's collapse will cost the FDIC's insurance fund $47 million.

Hundreds more banks are expected to fail in the next few years largely because of souring loans for commercial real estate. The number of banks on the FDIC's confidential “problem listâ€

Good to see that the system still works as designed.