The Federal Deposit Insurance Corp. seized Sunshine State Community Bank of Port Orange, Fla., with $125.5 million in assets; Peoples State Bank, based in Hamtramck, Mich., with $390.5 million in assets; and Badger State Bank of Cassville, Wis., with $83.8 million in assets.
Miami-based Premier American Bank agreed to assume the assets and deposits of Sunshine State Community Bank. First Michigan Bank, based in Troy, Mich., is acquiring the assets and deposits of Peoples State Bank. Royal Bank, based in Elroy, Wis., is assuming the assets and deposits of Badger State Bank.
In addition, the FDIC and First Michigan Bank agreed to share losses on $331 million of Peoples State Bank's loans and other assets.
The failure of Sunshine State Community Bank is expected to cost the deposit insurance fund $30 million; that of Peoples State Bank is expected to cost $87.4 million; that of Badger State Bank, $17.5 million.
Florida has been one of the hardest-hit states for bank failures amid an avalanche of bad loans - especially for commercial real estate. Twenty-nine banks were shuttered in the state last year; Sunshine State Community Bank was the second Florida bank to fail in 2011. Other states that have seen large numbers of bank failures are Georgia, California and Illinois.
The 157 bank closures last year topped the 140 shuttered in 2009. It was the most in a year since the savings-and-loan crisis two decades ago. The FDIC has said that 2010 likely was the peak for failures as banks' losses from bad loans level out and work their way out of the system.
The 2009 failures cost the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were on average smaller. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three succumbed in 2007.
The growing number of bank failures has sapped billions of dollars out of the deposit insurance fund. It fell into the red in 2009, and its deficit stood at $8 billion as of Sept. 30.
The number of banks on the FDIC's confidential "problem" list rose to 860 in the third quarter of last year from 829 three months earlier. The 860 troubled banks is the highest number since 1993, during the savings-and-loan crisis.
The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.
Depositors' money - insured up to $250,000 per account - is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July.