Regulators Close 22nd and 23rd Banks of the Year

Another two bank failures announced late Friday pushed the running total to 23 banks shut down by federal regulators so far this year. Friday’s bank failures — one in Colorado and the other in North Carolina — will cost an estimated $801m to the Federal Deposit Insurance Corp. (FDIC) insurance fund. A total $2.5bln in combined assets are on the line from the failed banks’ portfolios. The State Bank Commissioner in Colorado closed Greeley-based New Frontier Bank, naming FDIC as receiver. The FDIC created the Deposit Insurance National Bank of Greeley (DINB) from the bank’s insured deposits “to protect the depositors,” who now have 30 days to open accounts at other insured banks. San Francisco, Calif.-based Bank of the West assumes operational management of New Frontier’s main office and two branches during the 30-day transition period while the accounts are resolved. New Frontier had $2bln in total assets and $1.5bln in deposits as of late March, although the FDIC said some $150m in insured deposits and $4m in deposits “potentially exceeded the insurance limits” and were not transferred to the DINB at the time the bank was shut down. The FDIC did not transfer Frontier’s brokered deposits, certificates of deposit and individual retirement accounts to the DINB as part of the transaction. As receiver, the FDIC said it will retain New Frontier’s assets for later disposition and will absorb an estimated $670 million cost to the Deposit Insurance Fund. Read the FDIC’s press statement on New Frontier. The North Carolina Office of Commissioner of Banks closed Wilmington-based Cape Fear Bank, appointing the FDIC as receiver. The FDIC said it entered a purchase and assumption agreement with Charleston, S.C.-based First Federal Savings and Loan Association of Charleston, which assumes all of Cape Fear’s deposits. First Federal will purchase $468m of $492m in assets, as well as $403m in total deposits, from Cape Fear. The FDIC entered a loss-sharing agreement with First Federal on $395m of Cape Fear’s assets and estimated the cost to the Deposit Insurance Fund at $131m. Read the FDIC’s press statement on Cape Fear. Write to Diana Golobay at [email protected].