Seven More Banks Fail, Bringing Total to 140

The financial crisis has claimed seven more banks, bringing the total number of casualties this year to 140. The FDIC took over all seven of them: Two large banks in California, and smaller ones in Alabama, Florida, Georgia, Michigan and Illinois. California is among the states most severely impacted by the collapse of the real estate market, which has put pressure on mortgages written by community banks.First Federal Bank of California, based in Santa Monica, had $6.1 billion in assets and $4.5 billion in deposits, and Imperial Capital Bank of LaJolla had $4 billion in assets and $2.8 billion in deposits. So far this year, 17 California banks have failed.

The other failures were smaller. Atlanta's RockBridge Commercial Bank collapsed while holding $294 million in assets and $291.7 million in deposits; Citizens State Bank of New Baltimore, Mich., had $168.6 million in assets and $157.1 million in deposits. New South Federal Savings Bank, in Irondale, Ala., was a bit larger, with $1.5 billion in assets and $1.2 billion in deposits, as was Peoples First Community Bank of Panama City, Fla., ($1.8 billion in assets and $1.7 billion in deposits).

In Springfield, Ill., Independent Banker's Bank, which served as a type of wholesale bank to 450 client banks in four states, shut down. It had $585.5 million in assets and $511.5 million in deposits. OneWest Bank of Pasadena, Calif., is buying all its deposits and basically all its assets. Independent's 39 branches reopened on Saturday under the OneWest banner.

The only bank for which the FDIC couldn't find a buyer was RockBridge, so the FDIC will mail checks to its account-holders to cover insured deposits.

These bank failures subtract another $1.8 billion from the FDIC's insurance fund:
  • First Federal Bank of California: $146.3 million
  • Imperial Capital: $619.2 million
  • Citizens State Bank: $76.6 million
  • New South Federal Savings Bank: $212.3 million
  • Peoples First Community Bank: $556.7 million
  • Independent Banker's Bank: $68.4 million
  • RockBridge Commercial Bank: $124.2 million
RockBridge had more than $2 million in deposits that topped the FDIC's $250,000 limit per account, effectively making those account-holders creditors of RockBridge. They may recover some of their money, but it could take months. RockBridge was the twenty-fifth bank to go bust in Georgia this year, giving it the dubious distinction of being the state with the most bank failures in 2009.

The high number of bank failures has pushed the FDIC insurance fund into the red and has cost $30 billion. The FDIC expects the cost of the crisis to its insurance fund to reach $100 billion over the next four years.
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