Regulators shut banks in Fla, Mich, SC

Regulators shut banks in Fla, Mich, SC






by MARCY GORDON


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updated 7/16/2010 7:39:58 PM ET

WASHINGTON — Regulators on Friday shut down three banks in Florida, two in South Carolina and one in Michigan, bringing to 96 the
number of U.S. banks to succumb this year to the recession and mounting
loan defaults.


The Federal Deposit Insurance Corp. on Friday took over the banks: Woodlands Bank, based in Bluffton, S.C., with $376.2 million in assets; First National Bank of the South, based in Spartanburg, S.C., with $682
million in assets; and Mainstreet Savings Bank of Hastings, Mich., with
$97.4 million in assets.
The FDIC also seized Miami-based Metro Bank of Dade County, with assets of $442.3 million; Turnberry Bank of Aventura, Fla., assets of $263.9 million; and Olde Cypress Community Bank of Clewiston, Fla.,
assets of $168.7 million.
Miami-based NAFH National Bank, a newly chartered subsidiary of North American Financial Holdings Inc. of Charlotte, N.C., agreed to assume
the assets and deposits of First National Bank of the South, Metro Bank
of Dade County and Turnberry Bank. North American Financial Holdings
said Friday the acquisitions give it "a strong presence in attractive
banking markets," with 10 branches in the Miami area and 13 throughout
South Carolina.
Bank of the Ozarks, based in Little Rock, Ark., agreed to assume the assets and deposits of Woodlands Bank, while CenterState Bank of Florida
is assuming the assets and deposits of Olde Cypress Community Bank; and
Commercial Bank, based in Alma, Mich., is acquiring the assets and
deposits of Mainstreet Savings
Bank.
The failure of Woodlands Bank is estimated to cost the deposit insurance fund $115 million. Estimated costs for the others are: First National Bank of the South, $74.9 million; Mainstreet Savings Bank,
$11.4 million; Metro Bank of Dade County, $67.6 million; Turnberry Bank,
$34.4 million; and Olde Cypress Community Bank, $31.5 million.
With 96 closures nationwide so far this year, the pace of bank failures far outstrips that of 2009, which was already a brisk year for shutdowns. By this time last year, regulators had closed 57 banks. The
pace has accelerated as banks' losses mount on loans made for commercial
property and development.

The number of bank failures is expected to peak this year and be
slightly higher than the 140 that fell in 2009. That was the highest
annual tally since
1992, at the height of the
savings and loan crisis. The 2009 failures cost the insurance fund more
than $30 billion. Twenty-five banks failed in 2008, the year the
financial crisis struck with force, and only three succumbed in 2007.

As losses have mounted on loans made for commercial property and development, the growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, and
its deficit stood at $20.7 billion as of March 31.
The number of banks on the FDIC's confidential "problem" list jumped to 775 in the first quarter from 702 three months earlier, even as the
industry as a whole had its best quarter in two years.
A majority of institutions posted profit gains in the January-March quarter. But many small and midsized banks are likely to continue to
suffer distress in the coming months and years, especially from soured
loans for office buildings
and development
projects.
The FDIC expects the cost of resolving failed banks to total around $60 billion from 2010 through 2014.
The agency mandated last year that banks prepay about $45 billion in premiums, for 2010 through 2012, to replenish the insurance fund.
Depositors' money — insured up to $250,000 per account — is not at risk, with the FDIC backed by the government.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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