Bank closures in Missouri, Minnesota make 76 failures in '11
Friday, October 7, 2011
WASHINGTON (AP) — Regulators on Friday closed a small bank in Minnesota and one in Missouri, increasing to 76 the number of U.S. bank failures this year.
The number of closures has fallen sharply this year as banks have worked their way through the bad debt accumulated in the recession. By this time last year, regulators had shuttered 129 banks.
The Federal Deposit Insurance Corp. seized Riverbank, based in Wyoming, Minn., with $417.4 million in assets and $379.3 million in deposits; and Sun Security Bank of Ellington, Mo., with $355.9 million in assets and $290.4 million in deposits.
Central Bank, based in Stillwater, Minn., agreed to assume the assets and deposits of Riverbank. Great Southern Bank, based in Springfield, Mo., is assuming the assets and deposits of Sun Security Bank.
In addition, the FDIC and Central Bank agreed to share losses on $339.3 million of Riverbank's loans and other assets. The agency and Great Southern Bank agreed to share losses on $351.9 million of Sun Security Bank's assets.
The failure of Riverbank is expected to cost the deposit insurance fund $71.4 million; that of Security Bank is expected to cost $118.3 million.
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 was the high-water mark 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 fund balance turned positive in the second quarter of this year; it stood at $3.9 billion as of June 30.
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.