Banks closed in Fla, Ga, Ill; 2011 total is 68
Saturday, August 20, 2011
WASHINGTON (AP) — Regulators on Friday closed one bank each in Florida, Georgia and Illinois, lifting to 68 the number of U.S. bank failures this year.
The pace of closures has eased in 2011 as the economy has slowly improved and banks work their way through the bad debt accumulated in the Great Recession. By this time last year, regulators had shuttered 118 banks.
The Federal Deposit Insurance Corp. seized Lydian Private Bank, based in Palm Beach, Fla., with $1.7 billion in assets and $1.24 billion in deposits. Also shuttered were two smaller institutions: First Southern National Bank in Statesboro, Ga., with $164.6 million in assets and $159.7 million in deposits, and First Choice Bank in Geneva, Ill., with $141 million in assets and $137.2 million in deposits.
Miami-based Sabadell United Bank agreed to assume the assets and deposits of Lydian Private Bank. Heritage Bank of the South, based in Albany, Ga., is assuming the assets and deposits of First Southern National Bank. And Inland Bank & Trust, based in Oak Brook, Ill., is acquiring the assets and deposits of First Choice Bank.
The failure of Lydian Private Bank is expected to cost the deposit insurance fund $293.2 million. First Southern National Bank’s failure is expected to cost $39.6 million and First Choice Bank’s $31 million.
Florida, Georgia and Illinois have been among the hardest-hit states for bank failures.
Twenty-nine banks were shuttered in Florida last year. The shutdown of Lydian Private Bank brought to 10 the number of bank failures in the state this year. Regulators closed 16 banks each in Georgia and Illinois last year. First Southern National Bank is the 17th Georgia lender shut down this year, while First Choice Bank is the 7th in Illinois.
California also has seen large numbers of bank failures.
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 around $21 billion. The FDIC has said 2010 likely marked the peak for bank failures from the Great Recession.
In 2009, there were 140 bank failures that cost the insurance fund about $36 billion, a higher price tag than in 2010 because the banks involved were bigger on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.
From 2008 through 2010, bank failures cost the fund $76.8 billion. The deposit insurance fund fell into the red in 2009. With failures slowing, the FDIC’s deficit narrowed in the first quarter of this year; it stood at about $1 billion as of March 31.
Depositors’ money — insured up to $250,000 per account — is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July 2010.