Dec. 5 (Bloomberg) -- AmTrust Bank, a Cleveland-based lender with $12 billion in assets, joined five other U.S. banks in being seized by regulators as companies buckle under the weight of commercial real estate losses.
Closely held AmTrust collapsed alongside three banks in Georgia and one each in Virginia and Illinois, according to statements issued yesterday by the Federal Deposit Insurance Corp., which was named receiver. The failures will cost the FDIC’s deposit fund $2.38 billion, the agency said.
“The commercial real estate market is the big problem,” said James Barth, a former chief economist at the Office of Thrift Supervision. Office vacancy rates climbed to 13.3 percent nationally in the second quarter from 12.3 percent in the prior period, according to a CB Richard Ellis index.
With the closings, 130 U.S. lenders have collapsed this year. Banks are failing at the fastest pace in 17 years even as the U.S. economy shows signs of pulling out of the recession. The unemployment rate fell to 10 percent from 10.2 percent in October, according to figures from the Labor Department. The number of failed banks reached 179 in 1992.
“The unemployment rate is quite high, so unless there is a turnaround in sales you will see commercial real estate continue to suffer,” Barth said.
The following table lists the banks seized yesterday. Asset and deposit figures are in millions of U.S. dollars.
Failed Bank Buyer Assets Deposits
AmTrust Bank N.Y. Comm. Bank 12,000 8,000 Cleveland Westbury, N.Y.
Buckhead Comm. Bank State Bank & Trust 874 838 Atlanta Macon, Ga.
Greater Atlantic Bank Sonabank 203 179 Reston, Va. McLean, Va.
Benchmark Bank MB Financial Bank 170 181 Aurora, Ill. Chicago
First Security NB State Bank & Trust 128 123 Norcross, Ga. Macon, Ga.
Tattnall Bank HeritageBank 49.6 47.3 Reidsville, Ga. Albany, Ga.
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