Another two bank failures announced late Friday pushed the running total to 25 banks shut down by federal regulators so far this year, marking a substantial increase from the pace of bank failures seen last year. As of April 2008, regulators had closed only two banks, demonstrating the continued effects of deteriorating financial markets on U.S. banks. Friday’s bank failures will cost an estimated $84m to the Federal Deposit Insurance Corp. (FDIC) insurance fund. The failures put a total $452m in combined assets on the line for purchase or disposition. The Office of Thrift Supervision closed Sugar Creek, Mo.-based American Sterling Bank, naming FDIC as receiver. The FDIC entered a purchase and assumption agreement with Lee’s Summit, Mo.-based Metcalf Bank, which agreed to purchase all of the failed bank’s deposits. American Sterling, the 24th bank to fail in ’09, had $181m in total assets and $171.9m in deposits as of late March. Metcalf agreed to purchase some $173.6m of the bank’s total assets and enter a loss-sharing transaction with the FDIC on approximately $100m in assets. As receiver, the FDIC said it will retain the remainder of American Sterling’s assets after Metcalf’s purchase for later disposition, and will absorb an estimated $42m cost to the Deposit Insurance Fund. Read the FDIC’s press statement on American Sterling. The Nevada Financial Institutions closed Elko, Nev.-based Great Basin Bank of Nevada, naming FDIC as receiver. The FDIC entered a purchase and assumption agreement with Las Vegas-based Nevada State Bank. Great Basin, the 25th bank to fail in ’09, had $270.9m in total assets and $221.4m in deposits as of year-end ’08. Nevada State Bank agreed to purchase all of the failed bank’s deposits and $252.3m of the bank’s total assets and enter a loss-sharing transaction with the FDIC on approximately $143.4m in assets. As receiver, the FDIC said it will retain the remainder of Great Basin’s assets after Nevada State’s purchase for later disposition, and will absorb an estimated $42m cost to the insurance fund. Read the FDIC’s press statement on Great Basin. Write to Diana Golobay at email@example.com.
Two Bank Failures Push ’09 Count to 25
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