Regulators shut down 2 banks in Georgia, 1 in Arizona; makes 146
US bank failures this year
Regulators on Friday shut down two banks in Georgia and one in
Arizona, bringing to 146 the number of U.S. banks that have
succumbed this year under the burden of bad loans and a tepid
The Federal Deposit Insurance Corp. took over the two Georgia
banks: Darby Bank & Trust Co., based in Vidalia, with $654.7
million in assets, and Tifton Banking Co. of Tifton, with $143.7
million in assets. Also seized was Copper Star Bank, based in
Scottsdale, Ariz., with $204 million in assets.
Ameris Bank, based in Moultrie, Ga., agreed to assume the assets
and deposits of the two failed Georgia banks. In addition, the FDIC
and Ameris Bank agreed to share losses on $560.2 million of the two
banks' loans and other assets.
As a result of the acquisitions, Ameris Bank said it will now
operate 60 locations in Georgia, Florida, Alabama and South
The failures of Darby Bank & Trust Co. and Tifton Banking Co.
are expected to cost the deposit insurance fund a total $160.8
million. That of Copper Star Bank is expected to cost $43.6
Georgia is among the states that have seen bank failures in the
double digits this year. Some communities in the states -- also
California, Florida and Illinois -- are still reeling from the
financial meltdown that brought an avalanche of bad loans,
especially for commercial real estate. The two shutdowns Friday
brought the number of bank failures in Georgia this year to 18.
Stearns Bank, based in St. Cloud, Minn., agreed to assume the
assets and deposits of Copper Star Bank. In addition, the FDIC and
Stearns Bank are sharing losses on $165.2 million of Copper Star
The 146 closures nationwide so far this year tops the 140 shuttered
in all of 2009 and is the most in a year since the savings-and-loan
crisis two decades ago. By this time last year, regulators had
closed 123 banks.
The 2009 failures cost the insurance fund about $36 billion; the
failures so far this year have cost around $21 billion, less
because the banks failing in 2010 have on average been smaller.
Twenty-five banks failed in 2008, the year the financial crisis
struck with force; only three succumbed in 2007.
The growing bank failures have sapped billions of dollars out of
the deposit insurance fund. It fell into the red last year, and its
deficit stood at $15.2 billion as of June 30.
The number of banks on the FDIC's confidential "problem" list
jumped to 829 in the second quarter from 775 three months earlier,
even as the industry as a whole had its best quarter since 2007,
making $21.6 billion in net income. Banks with more than $10
billion in assets -- only 1.3 percent of the industry -- accounted
for $19.9 billion of the total earnings.
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
Written by: Marcy Gordon, AP Business Writer