The Federal Deposit Insurance Corp. or FDIC announced the shuttering of a bank in Michigan, taking the count of U.S. bank closures to 16 this year.
Fidelity Bank, Dearborn, Michigan, was closed today by the Michigan Office of Financial and Insurance Regulation, which appointed the FDIC as receiver. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $92.8 million.
As of December 31, 2011, Fidelity Bank had about $818.2 million in total assets and $747.6 million in total deposits at the end of last year.
Huntington National Bank of Columbus, Ohio, reached an agreement with the Federal Deposit Insurance Corp. to assume all of the deposits of Fidelity Bank. In addition to assuming all of the deposits of the failed bank, The Huntington National Bank agreed to purchase essentially all of the assets
The latest failure adds to the assets of Huntington Bancshares Inc., (HBAN: Quote) currently has 50 banking offices in Southeast Michigan, more than 115 in Michigan and more than 600 branches throughout the Midwest. Huntington assisted the FDIC with two other Michigan bank failures in 2009, when the number of failures far outpaced tallies seen in recent years.
Huntington said that it has completed due diligence on more than half of the loan portfolio, resulting in an acquisition asset discount of approximately $150 million. In 2012, the transaction is expected to be over 2% accretive to earnings per share, less than 1% accretive to tangible book value, and very modestly dilutive to Huntington's capital ratios
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.
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by RTT Staff Writer
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