Feds Shut 5 Banks In Calif., Ga., Minn.

FDIC Appointed Receiver; Number Of Failures This Year Now 45

(AP)  Regulators on Friday shut down five small banks, boosting to 45 the number of failures this year of federally insured banks. More are expected to succumb in the prolonged recession.

The Federal Deposit Insurance Corp. was appointed receiver of the failed banks: Community Bank of West Georgia, based in Villa Rica, Ga.; Neighborhood Community Bank, located in Newnan, Ga.; Horizon Bank in Pine City, Minn.; MetroPacific Bank in Irvine, Calif.; and Mirae Bank in Los Angeles.

Community Bank of West Georgia had $199.4 million in assets and $182.5 million in deposits as of May 15. Neighborhood Community Bank had $221.6 million in assets and $191.3 million in deposits as of March 31. Horizon Bank had $87.6 million in assets and $69.4 million in deposits as of March 31. MetroPacific Bank had $80 million in assets and deposits of $73 million as of June 8. Mirae Bank had $456 million in assets and $362 million in deposits as of May 29.

The two closures in Georgia brought to 14 the number of banks in Georgia that have failed since the beginning of last year, more than in any other state. Most of the failures have involved banks in the Atlanta area, where the collapse of the real estate market brought economic dislocation.

CharterBank, based in West Point, Ga., agreed to assume all of the deposits of Neighborhood Community Bank and to purchase about $209.6 million of the assets; the FDIC will retain the remaining assets for later disposition. Neighborhood Community's four offices will reopen as branches of CharterBank.

The FDIC said it will mail checks to Community Bank of West Georgia depositors for the amounts of their insured funds. Direct deposits from the government, such as Social Security and veterans' benefits, will be transferred to United Community Bank in Blairsville, Ga.

All of the deposits at Horizon Bank will be assumed by St. Cloud, Minn.-based Stearns Bank NA. Stearns Bank also agreed to purchase $84.4 million of Horizon Bank's assets. The FDIC will retain the remaining assets for later disposition. Horizon Bank's two offices will reopen Saturday as branches of Stearns Bank, and customers accounts will automatically be transferred to Stearns Bank.

Nearly all of MetroPacific Bank's deposits will be assumed by Tustin, Calif.-based Sunwest bank. Only about $6 million in brokered deposits will not be absorbed by Sunwest. The FDIC will pay brokers directly for the amount of those funds. Virtually all of MetroPacific Bank's assets are being purchased by Sunwest Bank. MetroPacific Bank's lone office will reopen Monday as a branch of Sunwest Bank. Deposits will be automatically transferred to Sunwest Bank.

Los Angeles-based Wilshire State Bank will assume all of Mirae Bank's deposits and $449 million of its assets. The remaining assets will be retained by the FDIC for later disposition. Mirae Bank's five offices will be reopened Monday as branches of Wilshire State Bank.

The 45 banks closed nationwide this year compare with 25 in all of 2008 and three in 2007.

The FDIC estimates that the cost to the deposit insurance fund from the failure of Community Bank of West Georgia will be $85 million. CharterBank's failure will cost the fund $66.7 million. The failure of Horizon Bank is expected to cost the fund $33.5 million, while the closure of MetroPacific Bank will cost the fund about $29 million. Mirae Bank's failure will cost the fund $50 million.

As the economy has soured, with unemployment rising, home prices tumbling and loan defaults soaring, bank failures have cascaded and sapped billions out of the deposit insurance fund. It now stands at its lowest level since 1993, $13 billion as of the first quarter.

While the pounding from losses on home mortgages may be nearing an end, delinquencies on commercial real estate loans remain a hot spot of potential trouble, FDIC officials say. If the recession deepens, defaults on the high-risk loans could spike. Many regional banks hold large numbers of them.

The number of banks on the FDIC's list of problem institutions leaped to 305 in the first quarter - the highest number since 1994 during the savings and loan crisis - from 252 in the fourth quarter. The combined assets of those banks rose to $220 billion from $159 billion.

The FDIC expects U.S. bank failures to cost the insurance fund around $70 billion through 2013. The agency recently adopted a new system of emergency fees paid by U.S. financial institutions that shifts more of the burden to bigger banks to help replenish the fund.

Congress has more than tripled the amount the FDIC may borrow from the Treasury Department if needed to restore the insurance fund, to $100 billion from $30 billion.

Government "stress tests" of the 19 biggest U.S. banks last month showed that 10 of them had to raise a total of $75 billion in new capital to withstand possible future losses.

A key government effort to ease the credit crisis reached a milestone on June 17 as 10 large banks said they had repaid a total of $68 billion in federal bailout funds.

The Obama administration on Friday established its process for pricing billions of dollars worth of warrants that large banks must repurchase to exit the $700 billion bailout program.

In addition to the $68 billion in bailout funds repaid by the 10 large institutions, another $2 billion has been repaid by smaller banks.

The closing last month of struggling Florida thrift BankUnited FSB is expected to cost the insurance fund $4.9 billion, the second-largest hit since the financial crisis began. The costliest was the July 2008 seizure of big California lender IndyMac Bank, on which the insurance fund is estimated to have lost $10.7 billion.

The largest U.S. bank failure ever also came last year: Seattle-based thrift Washington Mutual Inc. fell in September, with about $307 billion in assets. It was acquired by JPMorgan Chase & Co. for $1.9 billion in a deal brokered by the FDIC.

[walt1944]

45 banks have FAILED in the past 6 months!

And we are told this is ONLY a RECESSION!!!

Let's try calling it what it REALLY IS for once; a Neocon Fascist Nazi Republican DEPRESSION, inspired by the GREAT(???)economic mind of our time: GEORGE W. BUSH!!!!!!

Herbert Hoover, Adolph Hitler, and Joe Stalin would have been proud of him!!!!!

HAIL OBAMA?????

[John_Merritt]

Wow, you think there are some angry people out there? And these are only the bloggers and not average Joe citizen. I hope we can turn this thing around soon, otherwise I'm going to be looking for a cave to live. Good luck America, we sure got ourselves into a fine mess this time, huh?

[randomlybanned]

when Obama is through screwing all of us, we will be lucky to find a cave to live it.

[mcintoshlou]

If ever a chief executive rendered himself inoperative, Gov. Mark Sanford did so in skipping out on his responsibilities to South Carolina?s four million citizens for six days on a secretive personal fling in Argentina. In the process, Mr. Sanford failed to transfer emergency powers to the lieutenant governor, as provided in the State Constitution, leaving his state vulnerable to all manner of crises while the governor was nowhere to be found.

This is a compelling reason that Mr. Sanford should resign from office. There are others. He lied to the state and his staff in concocting a false trail to mask his trysting. He tapped taxpayer funds to drum up a trade mission last year that allowed him to see his lover.

THIS IS THE TYPE OF PERSON THAT CAUSED THE FINANCIAL COLLAPSE,

CHECK OUT HIS ROLL BACK OF REGULATIONS

designed to help Americans,

he is right up there with ensign, vitter, larry craig, and David Duke,

right wing animals

[rushlimpdrug]

Great post. On top of that, it was reported that the gov's wife
found out about the gov's affair by going through official files in
the gov's office.
Wonder if he was using government time/money/resources to do it.
This would probably constitute breaking a law, but then again,
the people of that state are too stupid to do anything about it.
Think I'll go hiking tomorrow.

[randomlybanned]

hmmm, not gonna mention Dodd, Fwanks, Pelosi, Obama, Gore, Blago, Clinton, Conyers, Rangel, Daley?... well, as you can see, the list of dirty dealers could go on and on and on....

[hclinton2012]

Welcome to the "new normal"? High unemployment, high foreclosers and more Big Government spending on Wall Street's "fat-cats" that support Democrats? More bank failures, even after billions given to all those financial institutions that give lobbyist money to Democrats in Congress, like Frank Barney, Chris Dodd and Charles Schummer? Obamamonics, isn't it GREAT?

[grabandgo]

The government wants 1 or 2 banks to control everything.
Nothing can go wrong....go wrong....go wrong

[davidjskjonsby]

Shades of the dirty '30's.
The big banks took our land
for 10 cents on the dollar.

[davidjskjonsby]

Shades of the "dirty 30's."
The BIG banks took our land
for 10 cents on the dollar.

[specialty8]

Yep, the stimulis is right on track Obama. All of these new jobs, the stock market is just out of sight, unemployment is in check, gas is at a all time low, and when are we going to have another White House party, at the tax payers expense, to celebrate? Better yet lets have another press conference to keep your poll ratings up,AGAIN.