Three more banks fail bringing this year's total to 92; Corus is a big one
Bank closings continue, but perhaps not at the rate that some analysts supposed. Some experts think the the financial crisis will claim 300 to 400 firms in 2009 and 2010. If that is going to happen, the pace of the shuttering will have to substantially accelerate.
On Friday, Federal regulators shut down three institutions -- including a large one, Corus Bank. (Related article: What banks are next as commercial real estate woes worsen?).
The Federal Deposit Insurance Corp. announced that the Office of the Comptroller of the Currency had closed Corus Bank, which lends money for construction projects. As of June 30, 2009, Corus Bank had total assets of $7 billion and total deposits of approximately $7 billion.
The agency said that the eleven branches of Corus, which is based in Chicago, will reopen and become branches of MB Financial Bank.
MB Financial will only assume $3 billion of the Corus assets. The FDIC will keep the balance and hope to sell them later. Corus has a large number of delinquent condominium loans and the underlying properties may eventually have substantial value. But that could be years off.
According to estimates from research firm Foresight Analytics quoted in The Wall Street Journal, Corus could ultimately cost taxpayers between $1.5 billion and $2.4 billion, depending on how its outstanding loans perform.
In a separate action, the FDIC became receiver for Brickwell Community Bank of Woodbury, Minnesota. The only branch of Brickwell will reopen as a branch of CorTrust Bank. As of July, 24, 2009, Brickwell had total assets of $72 million and total deposits of approximately $63 million.
In a third closing, the agency became the receiver for Venture Bank of Lacy, Washington. The eighteen branches of Venture Bank will become branches of First-Citizens Bank & Trust Company. As of July 28, 2009, Venture Bank had total assets of $970 million and total deposits of approximately $903 million.
At the rate of three a week, the FDIC will have become receiver for 135 banks in 2009.
Douglas A. McIntyre is an editor at 24/7 Wall St.