Saturday February 14, 2009
Navivest

Four more banks fell victim to the deteriorating economy and were closed by financial regulators in their respective states on Friday.

The banks, Pinnacle Bank, Beaverton, OR, Corn Belt Bank and Trust Company Pittsfield, IL, Riverside Bank of the Gulf Coast, Cape Coral, FL, Sherman County Bank, Loup City, NE were all relative small banks, with assets under $600 million.

The Federal Deposit Insurance Corporation, which insures U.S. banks, was named receiver of the banks and it has entered into purchase and assumption agreements with other banks that will now assume the deposits of the failed banks.

Pinnacle Bank had total assets of approximately $73 million and total deposits of $64 million as of December 31, 2008. Its deposits have been assumed by Washington Trust Bank of Spokane, Washington, which also agreed to purchase about $72 million in assets, at a discount of $7.6 million. The FDIC will retain the remaining assets of Pinnacle Bank for later disposition.

Corn Belt Bank and Trust Company had total assets of approximately $271.8 million and total deposits of $234.4 million as of December 31, 2008. Its deposits were assumed by The Carlinville National Bank of Carlinville, Illinois, which will pay the FDIC a premium of 1.75% for the deposits.

Riverside Bank had total assets of approximately $539 million and total deposits of $424 million as of December 31, 2008. The FDIC has entered into a purchase and assumption agreement with TIB Bank Naples, Florida, which has agreed to pay the FDIC a premium of 1.3% for the deposits.

Sherman County Bank had total assets of approximately $129.8 million and total deposits of $85.1 million as of February 12, 2009. Heritage Bank will purchase Sherman’s deposits for a 6% premium. Heritage Bank also agreed to purchase approximately $21.8 million in assets, that’s comprised mostly of cash, cash equivalents and marketable securities. The FDIC will retain the bank’s remaining assets for later disposition.

The FDIC tries to ensure a smooth transition for bank customers in these situations and customers of the failed banks can write checks on their accounts and use their ATM cards over the weekend and on Monday, can start banking at the banks that are assuming their deposits.

The failure of these banks brings to thirteen, the number of banks that have failed so far in 2009, which is exactly half the 26 banks that failed in all of 2008 and four times the three banks that failed in 2007.

The four bank failures were announced on the day the Senate voted to pass President Obama’s economic stimulus bill, which the administration hopes will revive the weakening economy.

 
Tags: Bank Failure  FDIC