MARKET WILL SELL OFF ON OPEN AND FINISH IN THE RED
Banks Shut in 4 U.S. States, Pushing 2009 Bank Failures to 89
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By Dakin Campbell
Sept. 4 (Bloomberg) -- Lenders in Illinois, Iowa, Missouri and Arizona collapsed today, pushing the number of bank failures to 89 this year amid continuing fallout from the worst economic slump since the Great Depression.
Illinois lenders InBank of Oak Forest and Platinum Community Bank of Rolling Meadows; Vantus Bank of Sioux City, Iowa; First Bank of Kansas City, Missouri; and First State Bank of Flagstaff, Arizona were shut by regulators, and the Federal Deposit Insurance Corp. was named receiver, the agency said in statements today. Closing the lenders, with combined assets of $1.1 billion and deposits of $982 million, will cost the deposit insurance fund about $401 million.
Regulators have closed banks at the fastest pace in 17 years and more are likely as losses mount from soured real- estate debt. A total of 416 banks with combined assets of $299.8 billion failed the FDIC’s grading system for asset quality, liquidity and earnings in the second quarter, the most since June 1994, the regulator said in a report last month.
Great Southern Bank of Springfield, Missouri, bought Vantus in the lender’s second FDIC-assisted acquisition this year. Vantus, the biggest of today’s failures with $368 million in deposits and about $458 million in assets, had 15 branches that will open tomorrow as Great Southern offices, according to the FDIC. Great Southern is purchasing $387 million of Vantus’ assets with the FDIC sharing losses on $338 million.
The Office of Thrift Supervision closed Platinum Community Bank, with the FDIC approving a payout on insured deposits. Platinum had deposits of $305 million and assets of $345.6 million. MB Financial Bank of Chicago will accept Platinum’s federal government direct deposits.
MB Financial, InBank
In a separate transaction, MB Financial bought about $150 million of InBank’s deposits and $212 million in assets. MB Financial didn’t buy $50 million in brokered deposits, the lender said in a statement. InBank’s three branches will open tomorrow as offices of MB Financial.
Sunwest Bank of Tustin, California, acquired First State Bank’s $95 million in deposits and $105 million in assets, the FDIC said. The six branches of First State Bank will open Sept. 8 as offices of Sunwest.
Great American Bank bought First Bank of Kansas City’s $15 million in deposits and $16 million in assets. The sole branch of First Bank will open tomorrow as an office of Great American.
The FDIC insures deposits at 8,195 institutions with roughly $13.5 trillion in assets and reimburses customers for deposits of up to $250,000 per account when a bank fails. The surge in failures has depleted the Washington-based regulator’s deposit insurance fund, which fell to $10.4 billion at the end of June from $13 billion in the previous quarter, the agency said. The total was the lowest since 1993.
The agency has brokered the 6th and 11th largest bank failures in history this year in Birmingham, Alabama-based Colonial BancGroup Inc. and Austin, Texas-based Guaranty Financial Group Inc.