Aug. 1 (Bloomberg) — Banks in New Jersey, Ohio, Florida, Oklahoma and Illinois were shut, pushing the toll of failed U.S. lenders to 69 this year, amid a 26-year high in unemployment and the worst economic slump since the Great Depression.
The Federal Deposit Insurance Corp. was named the receiver of the five banks, the regulator said yesterday in e-mailed statements. The seized banks, with total assets of $2.69 billion and deposits of $2.56 billion, will cost the FDIC’s insurance fund about $911.7 million.
Mutual Bank of Harvey, Illinois, was the biggest of yesterday’s failures, with $1.6 billion in assets and the same amount in deposits. Peoples Community Bank in West Chester, Ohio, was second, with $705.8 million in assets and $598.2 million in deposits. Also shuttered were New Jersey’s First BankAmericano, Integrity Bank in Florida and First State Bank of Altus, Oklahoma.
Regulators are closing lenders at the fastest pace in 17 years, depleting the FDIC’s deposit insurance fund by more than $14.4 billion since January. The FDIC is offering to share losses with buyers of assets from failed banks, reviving a practice followed during the collapse of the savings-and-loan industry in the late 1980s.
The FDIC insures deposits at 8,246 institutions with $13.5 trillion in assets and reimburses customers for deposits of up to $250,000 when a bank fails.
Mutual Bank was closed by the Illinois Department of Financial Professional Regulation and its 12 branches will open tomorrow as offices of United Central Bank in Garland, Texas. United Central is buying all of Mutual Bank’s assets and deposits, with the FDIC sharing losses on $1.3 billion of assets.
The 19 branches of Peoples Community Bank, shut by the Office of Thrift Supervision, will reopen Aug. 3 as part of First Financial Bank in Hamilton, Ohio. First Financial is buying the deposits and the FDIC agreed to share losses on $657.6 million of assets.
First BankAmericano of Elizabeth, New Jersey, was seized by the state Department of Banking and Insurance. Crown Bank of Brick, New Jersey, is assuming the failed bank’s $157 million of deposits and almost all of its $166 million in assets. The six offices will open tomorrow as part of Crown Bank.
The Florida Office of Financial Regulation closed Integrity Bank of Jupiter, Florida, and sold the $102 million of deposits to Stonegate Bank in Fort Lauderdale. Stonegate agreed to buy $52 million in assets and will reopen Integrity Bank’s sole office on Aug. 3.
First State Bank of Altus was shut by the Oklahoma State Banking Department, and Herring Bank in Amarillo, Texas, is assuming the $98.2 million of deposits. Herring is purchasing $64.4 million in assets and reopening the branches tomorrow.
To contact the reporters on this story: Ari Levy in San Francisco at email@example.com; Margaret Chadbourn in Washington at firstname.lastname@example.org.
Last Updated: August 1, 2009 00:00 EDT
By Ari Levy and Margaret Chadbourn