Regulators shut down three more banks Friday and sold the remains of two of them to financial institutions that had.
By User, In News, on January 1, 2009 Tags: Bailout, Bank, Failures, TARP, Treasury department
Regulators shut down three more banks Friday and sold the remains of two of them to financial institutions that had received taxpayer capital through the Treasury Department’s $700 billion Troubled Asset Relief Program.
The Federal Deposit Insurance Corp. said there were no takers for the operations of the third bank, MagnetBank of Salt Lake City.
Regulators have closed six banks so far this year, compared with 25 for all of 2008. Of the six that failed, four were taken over by other institutions whose balance sheets were bolstered with TARP money. The original legislation creating the $700 billion aid program for the financial services industry did not list those types of deals as a goal.
The Comptroller of the Currency closed Ocala National Bank, of Ocala, Fla., on Friday. It had $205.2 million in deposits and $223.5 million in assets. The FDIC was named receiver and sold the deposits to CenterState Bank of Winter Haven, Fla.
Ocala National’s four branches will open Monday as CenterState branches.
CenterState paid a premium of 1.7 percent to acquire the failed bank’s deposits, and also purchased $23.5 million of its assets, the FDIC said.
CenterState’s parent company, CenterState Banks of Florida Inc., got $27.9 million in new capital from the Treasury Department in November by selling preferred stock to the government.
The Office of Thrift Supervision shut down Suburban Federal Savings Bank, of Crofton, Md., at the end of last week. Its deposits went to Bank of Essex, based in Tappahannock, Va.
Suburban Federal had deposits of $302 million and assets of $360 million. The FDIC said that, in addition to taking over Suburban Federal’s deposits, Bank of Essex agreed to buy roughly $348 million of the thrift’s assets at a $45 million discount.
Suburban Federal’s seven branches reopened Saturday as Bank of Essex branches.
Bank of Essex’s parent company, Community Bankers Trust Corp., got $17.7 million in taxpayer capital in December through the Treasury Department’s stock-purchase program. A few weeks earlier, it had taken over the deposits and four branches of another failed bank, Community Bank of Loganville, Ga.
Community Bank had deposits of $611.4 million and assets of $681 million. Bank of Essex paid a premium of $3.2 million to take over those deposits, and also bought $84.4 million of the bank’s assets.
MagnetBank in Salt Lake City had deposits of $292.9 million and assets of $282.8 million at the start of December. Because the FDIC was unable to find anyone to take over the bank’s operations, it will return the deposits to customers.