The Federal Deposit Insurance Corp. (FDIC) seized three more banks on Friday, bringing the total for the year to 133, with hundreds more on the problem bank list for next year, which could see a lot more failures going forward.
This week, banks in Florida, Kansas and Arizona succomed, costing an estimated $252 million more to the deposit insurance fund, which has been under heavy pressure for some time.
The first bank seized and sold on Friday by the FDIC was Republic Federal Bank NA, based in Miami, Florida, where most of its assets, and all of its branches and deposits were taken over by 1st United Bank of Boca Raton, Florida. That failure alone is estimated to cost the deposit insurance fund $122.6 million.
The cost of the Kansas bank to the deposit insurance fund was almost identical to Republic Federal Bank in Florida, costing $122.1 million to shutter Solutions Bank of Overland Park. Solutions was sold to Arvest Bank, based in Fayetteville, Arkansas; including all its assets, branches and deposits.
As mentioned earlier, next year will continue to be a bad year for bank closings, putting more pressure on the deposit insurance fund of the FDIC, which was operating in the red last quarter, and is sturggling to raise funds without having to tap its credit line with the Treasury Department, which could bring up to $500 billion to the agency if it needed it.
About $45 billion will be raised through pre-paid premiums from the banking industry to help the FDIC protect the deposits of bank customers. That should be paid over a three-year period to protect the capital ratios of the banks and not place undue burdens on them.
The 133 bank failures in 2009 are the largest number of seized banks since the 181 the fell in 1992 from the consequences of the savings-and-loan debacle.
