FDIC Closes Four More Banks

The Federal Deposit Insurance Corporation (FDIC) took over four more banks at the end of last week, bringing the total of 2009 bank failures to 57. Two of the closings were in California and one in Georgia--two states hard hit by real estate losses.

Regulators closed Temecula Vally Bank, of Temecula, California and Vineyard Bank, National Association, Rancho Cucamonga, California. First-Citizens Bank and Trust Company, Raleigh, North Carolina, agreed to purchase the deposits of Temecula Valley Bank, which had assets of $1.5 billion and total deposits of approximately $1.3 billion. In addition to assuming all of the deposits of the failed bank, First-Citizens Bank and Trust Company agreed to purchase essentially all of the assets.

California Bank & Trust, San Diego, California, will assume all of the deposits of Vineyard Bank, N.A., excluding those from brokers. As of March 31, 2009, Vineyard Bank, N.A. had total assets of $1.9 billion and total deposits of approximately $1.6 billion. In addition to assuming all of the deposits of the failed bank, California Bank & Trust agreed to purchase approximately $1.8 billion of assets. The FDIC will retain the remaining assets for later disposition.

California Bank & Trust will purchase all deposits, except about $134 million in brokered deposits, held by Vineyard Bank, N.A. 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.

FDIC took control of First Piedmont Bank, Winder, Georgia, and entered into a purchase and assumption agreement with First American Bank and Trust Company, Athens, Georgia, to assume all of the deposits. As of July 6, 2009, First Piedmont Bank had total assets of $115 million and total deposits of approximately $109 million. First American Bank and Trust Company paid a deposit premium of 1.01 percent. In addition to assuming all of the deposits of the failed bank, First American Bank and Trust Company agreed to purchase approximately $111 million of assets. The FDIC will retain the remaining assets for later disposition.

BankFirst, Sioux Falls, South Dakota, was closed by the South Dakota Division of Banking, which appointed the FDIC as receiver. FDIC entered into a purchase and assumption agreement with Alerus Financial, National Association, Grand Forks, North Dakota, to assume all of the deposits of BankFirst.

As of April 30, 2009, BankFirst had total assets of $275 million and total deposits of approximately $254 million. In addition to assuming all of the deposits of the failed bank, Alerus Financial, N.A. will acquire $72 million in assets, comprised of cash, securities and loans secured by deposits. The FDIC entered into a separate agreement with Beal Bank Nevada, Las Vegas, Nevada, to acquire $177 million of the failed bank's loans. The FDIC will retain the remaining assets for later disposition.

The total cost to the taxpayer of closing the four banks is just over $1 billion, according to FDIC. With the latest bank failures, 10 Georgia banks have closed so far this year, the most of any state. California is next with eight bank failures.

Despite the large number of bank failures, the number is not on pace to eclipse 1992, when 181 banks were closed by FDIC.

By Mark Huffman