Banks in Georgia, North Carolina and Kansas with total assets of $1.5 billion were closed today, bringing this year’s tally of failures to 40 amid the highest unemployment in a quarter century.Forty bank failures is not the proper way to look at things. The reality is they all (or nearly all) failed. However only forty (so far) have been closed.
State regulators shut Southern Community bank of Fayetteville, Georgia and Cooperative Bank in Wilmington, North Carolina. The Office of the Comptroller of the Currency closed First National Bank of Anthony, Kansas. The Federal Deposit Insurance Corp. was named as receiver for all three, according to statements from the FDIC.
Southern Community’s $307 million in deposits were bought by United Community Bank of Blairsville, Georgia, and most of Cooperative’s $774 million in deposits went to First Bank in Troy, North Carolina, the FDIC said. Bank of Kansas in South Hutchinson acquired First Bank’s $142.5 million in deposits. The acquiring banks are taking over a combined $1.47 billion in assets, mostly loans, from the failed institutions, and signed agreements with the FDIC to share more than 80 percent of the losses with the government.
As many as 1,000 U.S. banks could fail in the next three to five years on losses related to commercial real estate loans, RBC Capital Markets analysts said in February. The FDIC estimates U.S. bank failures through 2013 may cost $70 billion.
The FDIC classified 305 banks as “problem” institutions in the first quarter, a 21 percent jump from the fourth quarter and the highest since 1993, the agency said May 27. The agency doesn’t identify problem lenders.
The FDIC insures deposits at 8,246 institutions with $13.5 trillion in assets.
Mike "Mish" Shedlock
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