Regulators close 2 small banksWASHINGTON — Federal regulators have closed small banks in Georgia and Illinois, bringing to 15 the number of banks that have failed so far this year.
By: Associated Press, INFORUM
WASHINGTON — Federal regulators have closed small banks in Georgia and Illinois, bringing to 15 the number of banks that have failed so far this year.
The pace of bank closures has slowed sharply after ballooning following the financial crisis in 2008. By this time last year, 25 banks had failed.
On Friday the Federal Deposit Insurance Corp. shuttered Covenant Bank & Trust in Rock Spring, Ga., and Premier Bank, based in Wilmette, Ill. Each bank operated two branches.
Covenant Bank & Trust had about $95.7 million in assets and $90.6 million in deposits as of Dec. 31. Stearns Bank, National Association of St. Cloud, Minn., agreed to assume Covenant Bank's deposits and assets.
Premier Bank had about $268.7 million in assets and $199 million in deposits. International Bank of Chicago agreed to assume Premier's deposits and assets.
The FDIC estimates the bank failures will cost the Deposit Insurance Fund $95.6 million.
So far this year, four banks have failed in Georgia, and three in Illinois.
In all of 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. Those failures cost the fund around $23 billion. The FDIC has said 2010 likely was the high-water mark for bank failures from the Great Recession. Last year 92 banks failed, costing the fund about $7.9 billion.
In 2009 there were 140 bank failures that cost the insurance fund about $36 billion. It was a larger sum than in 2010 because the banks involved were bigger on average. Twenty-five banks failed in 2008, the year the financial crisis struck. Only three closed in 2007.
From 2008 through 2010, bank failures cost the fund an estimated $79 billion. The FDIC expects failures from 2011 through 2015 to cost $19 billion.
The deposit insurance fund fell into the red in 2009. With failures slowing, the FDIC's fund balance turned positive in the second quarter of last year.
At Dec. 31 it stood at $9.2 billion, nearly 18 percent higher than three months earlier, according to the FDIC.
Copyright 2012 The Associated Press.