The Federal Deposit Insurance Corp. or FDIC announced Friday the shuttering of three, taking the count of U.S. bank closures in 2011 to 61, after the 157 bank closures in 2010.
The three banks were closed on Friday by the regulators, with the assets of the failed banks beings assumed by other banks in an FDIC assisted transaction. The FDIC estimates that the cost to the Deposit Insurance Fund or DIF, by the three bank closures will be a total of $253.4 million.
Richmond, Virginia-based Xenith Bank (XBKS) acquired the banking operations, including all the deposits, of Virginia Business Bank, and Orangeburg, South Carolina-based SCBT, National Association (SCBT), acquired the banking operations of Columbia, South Carolina-based BankMeridian, N.A.
Meanwhile, Evansville, Indiana-based Old National Bank (ONB) will assume all of the deposits of Evansville, Indiana-based Integra Bank, National Association (IBNK.PK) from FDIC.
Virginia Business Bank was closed by Virginia State Corporation Commission. As of March 31, 2011, Virginia Business Bank had about $95.8 million in total assets and $85.0 million in total deposits.
Xenith Bank agreed to purchase essentially all of the Virginia Business bank's assets, while assuming all of the deposits of the failed bank. The FDIC estimates that the cost to the DIF will be $17.3 million on transaction.
Meanwhile, BankMeridian, N.A. was closed by the Office of the Comptroller of the Currency. As of March 31, 2011, BankMeridian had $215.5 million in total deposits and about $239.8 million in total assets.
SCBT, National Association agreed to purchase all of BankMeridian's assets, while assuming all of the deposits of the failed bank. The FDIC estimates that the cost to the DIF will be $65.4 million on the transaction. The FDIC and SCBT also entered into a loss-share transaction on $179.0 million of BankMeridian's assets.
Also, Integra Bank, National Association was closed by the Office of the Comptroller of the Currency. As of March 31, 2011, Integra Bank had $2.1 billion in total assets and about $1.9 billion in total deposits.
Old National Bank agreed to purchase all of Integra Bank's assets, while assuming all of the deposits of the failed bank at a premium of 1.0 percent. The FDIC estimates that the cost to the DIF will be $170.7 million on the transaction. The FDIC and Old National Bank also entered into a loss-share transaction on $1.2 billion of Integra Bank's assets.
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 7,575 banks and savings associations.
An average of 13 banks failed per month in 2010, with bank closures for 2011 currently averaging about 9 per month. The 157 bank closures in 2010 were up from 140 in 2009 and more than six 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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