February 16, 2009
Federal and state regulators were busy last week, closing insolvent banks in Florida, Illinois, Nebraska and Oregon. That brings to 13 the number of banks closed so far in 2009, and more than 80 since 2000.
The Federal Deposit Insurance Corporation (FDIC) and Oregon Division of Finance and Corporate Securities closed Pinnacle Bank, based in Beaverton, Oregon. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Washington Trust Bank, Spokane, Washington, to assume all of the deposits of Pinnacle Bank.
As of December 31, 2008, Pinnacle Bank had total assets of approximately $73 million and total deposits of $64 million. In addition to assuming all of the deposits of the failed bank, including those from brokers, Washington Trust Bank agreed to purchase approximately $72 million in assets at a discount of $7.6 million. The FDIC will retain the remaining assets for later disposition.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $12.1 million. Washington Trust Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives, the agency said.
Corn Belt Bank and Trust Company, Pittsfield, Illinois, was closed by the Division of Banking, Illinois Department of Financial Regulation, which appointed the FDIC as receiver. FDIC entered into a purchase and assumption agreement with The Carlinville National Bank, Carlinville, Illinois, to assume all of the deposits of Corn Belt Bank and Trust Company.
As of December 31, 2008, Corn Belt Bank and Trust Company had total assets of approximately $271.8 million and total deposits of $234.4 million. The Carlinville National Bank will pay the FDIC a premium of 1.75 percent.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $100 million.
FDIC and the Florida Office of Financial Regulation also closed Riverside Bank of the Gulf Coast, Cape Coral, Florida, with TIB Bank of Naples assuming all deposits.
As of December 31, 2008, Riverside Bank had total assets of approximately $539 million and total deposits of $424 million. TIB Bank agreed to pay the FDIC a premium of 1.3 percent.
TIB Bank will not assume $142.6 million in brokered deposits held by Riverside Bank. The FDIC will pay the brokers directly for the amount of their funds. Customers who placed money with brokers should contact them directly for more information about the status of their deposits.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $201.5 million. TIB Bank's acquisition of all of the deposits was the "least costly" resolution for the FDIC's Deposit Insurance Fund compared to alternatives. Riverside Bank is the eleventh bank to fail in the nation this year. The last bank to fail in Florida was Ocala National Bank on January 30, 2009.
Working with FDIC, the Nebraska Department of Banking and Finance shut down Sherman County Bank, Loup City, Nebraska. FDIC entered into a purchase and assumption agreement with Heritage Bank, Wood River, Nebraska, to assume all of the deposits of Sherman County Bank.
As of February 12, 2009, Sherman County Bank had total assets of approximately $129.8 million and total deposits of $85.1 million. Heritage Bank will pay the FDIC a premium of six percent. In addition to assuming all of the deposits of Sherman County Bank, Heritage Bank agreed to purchase approximately $21.8 million in assets, comprised mainly of cash, cash equivalents and marketable securities. The FDIC will retain the remaining assets for later disposition.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $28.0 million.
