The Federal Deposit Insurance Corp. or FDIC, announced Friday the shuttering of two small banks, one each in the states of Georgia and Illinois, taking the count of U.S. bank closures in 2012 to 15, after 92 in 2011 and the 157 bank closures in 2010. The closures are the fourth in the state of Georgia and the third in Illinois.
The two banks were closed on Friday by the regulators, with the assets of the failed banks beings assumed by other banks in FDIC assisted transactions. The FDIC estimates that the cost to the Deposit Insurance Fund or DIF, by the two bank closures will be a total of $95.6 million.
Stearns Bank, N.A., assumed the banking operations, including all the deposits, of Covenant Bank & Trust from FDIC, and International Bank of Chicago assumed from the FDIC all of the deposits of Premier Bank.
Rock Spring, Georgia-based Covenant Bank & Trust was closed by the Georgia Department of Banking and Finance. As of December 31, 2011, Covenant Bank had about $95.7 million in total assets and $90.6 million in total deposits.
St. Cloud, Minnesota-based Stearns Bank agreed to purchase essentially all of Covenant Bank's assets, while assuming all of the deposits of the failed bank, and entered into a loss-share transaction with FDIC on $71.6 million of Covenant Bank's assets.
Further, Wilmette, Illinois-based Premier Bank was closed by the Illinois Department of Financial and Professional Regulation - Division of Banking. As of December 31, 2011, Premier Bank had about $268.7 million in total assets and $199.0 million in total deposits.
Chicago, Illinois-based International Bank agreed to purchase all of Premier Bank's assets, while assuming all of the deposits the failed bank.
The FDIC noted that customers of all the failed banks can this evening and over the weekend access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed, and loan customers should continue to make their payments as usual.
Customers of the failed banks are protected, by the FDIC, which has insured bank deposits since the Great Depression, currently covering customer accounts up to $250,000. The FDIC insures deposits at the nation's 7,359 banks and savings associations.
Banks failures have continued at a relatively steady pace in early 2012, though the size and number of closures are well below levels seen during the prior three years. At the same time last year, 25 banks had failed.
On an average, 13 banks have failed per month in 2010, with bank closures for 2011 averaging only nearly eight per month, and currently averaging only five in 2012. The 92 bank closures in 2011 were down from 157 in 2010 and 140 in 2009, but nearly four times of the 25 bank failures in 2008. Only three banks failed in 2007. The highest and all time record for bank closures was in 1989 when 534 banks closed, followed by 181 bank failures in 1992.
by RTT Staff Writer
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