Four Banks, One Credit Union Fail

Five more financial institutions failed last Friday and were taken over by federal banking regulators.

One credit union in Florida was placed into conservatorship, and four banks - one each in Georgia, Michigan, Idaho and California -- were closed. This brings the total now to 29 banks that have failed and five credit unions that have either been closed or placed into conservatorships since the beginning of the 2009. In 2008, 25 banks and 15 credit unions failed.

The National Credit Union Administration took control of the operations of Eastern Financial Florida Credit Union, a state-chartered, federally-insured credit union headquartered in Miramar, FL. The Florida Office of Financial Regulations, Bureau of Credit Union Regulation appointed NCUA as conservator. NCUA appointed officials from Space Coast Credit Union of Melbourne, Fla., to temporarily manage Eastern Financial Florida Credit Union's day-to-day operations.

Eastern Financial Florida Credit Union, chartered in 1937, serves Broward, Miami-Dade, Palm Beach, Hillsborough, Pinellas counties and the Jacksonville area. The credit union has $1.6 billion in assets and more than 200,000 members.

American Southern Bank, Kennesaw, GA was closed by the Georgia Department of Banking and Finance. The FDIC was named receiver. The FDIC arranged for the Bank of North Georgia, Alpharetta, GA to assume all of the deposits, except those from brokers.

The one office of American Southern Bank reopened today as a branch of Bank of North Georgia. American Southern Bank had total assets of $112.3 million and deposits of $104.3 million. Bank of North Georgia paid a premium of 0.003 percent to acquire the deposits of American Southern Bank. Bank of North Georgia won't buy $48.7 million in brokered deposits held by American Southern Bank. Bank of North Georgia will buy $55.6 million of the failed bank's deposits; the bank will also buy $31.3 million of its assets. The cost to the FDIC Deposit Insurance Fund will be $41.9 million. American Southern Bank is the fifth bank in Georgia to fail this year. The last one was Omni National Bank, Atlanta on March 29.

Michigan Heritage Bank, Farmington Hills, MI, was closed by the Michigan Office of Financial and Insurance Regulation. The FDIC was named receiver. The FDIC arranged for Level One Bank, also of Farmington Hills, to assume all of the deposits, except those from brokers from the failed bank.

The three offices of Michigan Heritage reopened today as branches of Level One. Michigan Heritage had assets of $184.6 million and total deposits of $151.7 million. Level One paid a premium of 1.16 percent to buy the deposits of Michigan Heritage.

Level One won't buy $50 million in brokered deposits held by Michigan Heritage. Along with buying $101.7 million in deposits, Level One will also buy $46.1 million in assets. The cost to the FDIC Deposit Insurance Fund is $71.3 million. Michigan Heritage is the first bank in Michigan to fail in 2009. The last Michigan bank to fail was Main Street Bank, Northville on October 10, 2008.

The FDIC approved on Friday the payout of the insured deposits of First Bank of Beverly Hills, Calabasas, CA. The bank was closed by the California Department of Financial Institutions, and FDIC was named receiver.

First Bank of Beverly Hills had assets of $1.5 billion and deposits of $1 billion and an estimated $179,000 of uninsured deposits. First Bank of Beverly Hills is the fourth California bank to fail this year. The last bank to be closed in the state was County Bank, Merced, on February 6, 2009. The cost to the FDIC Deposit Insurance Fund will be $394 million.

First Bank of Idaho, FSB, Ketchum, ID was closed by the Office of Thrift Supervision on Friday, and FDIC was named receiver. The FDIC arranged for US Bank, Minneapolis, MN to assume all deposits of the failed bank, excluding those from brokers. The failed bank's seven offices in Idaho and Wyoming reopened today as branches of US Bank.

First Bank of Idaho had assets of $488.9 million and deposits of $374.0 million. US Bank paid 0.55 percent to acquire the failed bank's deposits. US Bank won't assume $112.8 million in brokered deposits. In addition to buying the deposits, US Bank will buy $17.8 million in assets. The cost to the FDIC Deposit Insurance Fund will be $191.2 million. The last bank to fail in Idaho was Northwestern Federal Savings and Loan Association, Boise, on August 26, 1988.


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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