Four More Banks Fail; Total Now 57 in '09

Four banks were closed by banking regulators last Friday, bringing the number of total bank failures to 57 so far this year.

One bank in South Dakota, one in Georgia and two in California were shut down. The combined assets of the four were $3.79 billion, deposits totaled $3.263 billion, and the cost to the FDIC Deposit Insurance Fund will be $1.09 billion.

BankFirst, Sioux Falls, SD, was closed by the South Dakota Division of Banking. The Federal Deposit Insurance Corporation (FDIC) was appointed receiver. The FDIC arranged for Alerus Financial, National Association, Grand Forks, ND, to assume all of the deposits of BankFirst. The failed bank had assets of $275 million and deposits of approximately $254 million. The FDIC entered into a separate agreement with Beal Bank Nevada, Las Vegas, Nevada, to acquire $177 million of the failed bank's loans. The cost to the FDIC's Deposit Insurance Fund will be $91 million. Bank First was the first South Dakota bank to fail since First Federal was closed in April 1992.

First Piedmont Bank, Winder, GA, was closed by the Georgia Department of Banking and Finance, with the FDIC appointed receiver. The FDIC arranged for First American Bank and Trust, Athens, GA to buy the failed bank's deposits. The failed bank had assets of $115 and deposits of $109 million. Estimated cost to the FDIC's DIF will be $29 million. First Piedmont Bank was the 10th Georgia bank to close in 2009. The last Georgia state bank to fail was Neighborhood Community Bank, Newnan, GA on June 26, 2009.

Vineyard Bank, National Association, Rancho Cucamonga, CA, was closed by the Office of the Comptroller of the Currency. The FDIC was appointed receiver and sold all the deposits of the failed bank to California Bank & Trust, San Diego. The failed bank had assets of $1.9 billion and deposits of $1.6 billion. The estimated cost to the DIF will be $579 million. Vineyard was the seventh bank to fail in the state in 2009. The last bank to close was Mirae Bank, Los Angeles, on June 26, 2009.

Temecula Valley Bank, Temecula, CA was also closed by the California Department of Financial Institutions. The FDIC as appointed receiver sold all the failed bank's deposits to First-Citizens Trust Company, Raleigh, NC. The failed bank had assets of $1.5 billion and deposits of $1.3 billion. First Citizen will also purchase all of the assets of Temecula Valley Bank. The estimated cost to the FDIC's DIF will be $391 million. Temecula Valley Bank is the eighth bank to close in California in 2009.

About the Author

Linda McGlasson

Linda McGlasson

Managing Editor

Linda McGlasson is a seasoned writer and editor with 20 years of experience in writing for corporations, business publications and newspapers. She has worked in the Financial Services industry for more than 12 years. Most recently Linda headed information security awareness and training and the Computer Incident Response Team for Securities Industry Automation Corporation (SIAC), a subsidiary of the NYSE Group (NYX). As part of her role she developed infosec policy, developed new awareness testing and led the company's incident response team. In the last two years she's been involved with the Financial Services Information Sharing Analysis Center (FS-ISAC), editing its quarterly member newsletter and identifying speakers for member meetings.

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