More On Legal & Compliancefrom The Advisor's Professional Library
- Regulatory Oversight of Investment Advisors Although the regulatory environment is in a state of flux, it is imperative that RIAs adhere to their compliance obligations. To ensure compliance, RIAs and IARs must fully understand what those obligations are.
- Privacy Policies and Rules Whether an RIA is SEC or state-registered, the firm must have policies and procedures in effect to protect clients privacy. Policies and procedures should explicitly require an RIA to send out its privacy notice each year.
Friday saw the closure of seven more banks in six states, for a total of twelve so far in October. The banks were First Arizona Savings, Scottsdale, Ariz.; First Bank of Jacksonville, Jacksonville, Fla.; Progress Bank of Florida, Tampa, Fla.; First National Bank of Barnesville, Barnesville, Ga.; Gordon Bank, Gordon, Ga.; First Suburban National Bank, Maywood, Ill. and Hillcrest Bank of Overland Park, Kan.
While six banks of the banks were taken over by other banks, First Arizona Savings found no such rescue, so on Monday checks for all insured funds will be mailed by the Federal Deposit Insurance Corp. (FDIC) to depositors. The bank had $1.8 million in uninsured funds at closing, out of approximately $272.2 million in total assets and $198.8 million in total deposits.
The largest bank of the group was Hillcrest Bank. Hillcrest, which will be taken over by a newly chartered bank subsidiary of NBH Holdings Corp. in Boston, had approximately $1.65 billion in total assets and $1.54 billion in total deposits. The new NBH subsidiary is also called Hillcrest Bank, and has agreed not only to assume all of the deposits of the shuttered Hillcrest Bank but also to purchase essentially all of the failed bank's assets, according to the FDIC.
Morris Bank paid a premium of 0.5% for Gordon Bank’s deposits, and agreed to purchase approximately $11.5 million of its assets in cash and cash equivalents; total assets had amounted to about $29.4 million (with total deposits in the amount of $26.7 million). The FDIC said in a statement that it will retain the remaining assets for later disposition.
This brings the total number of bank closures in 2010 to 139. According to a Reuters report, even though FDIC Chairman Sheila Bair has said she expects the number of failures in 2010 to exceed the 140 in 2009, she also expects that total assets for this year’s failures will be lower. The FDIC’s estimate of the total cost of failures to the Deposit Insurance Fund from 2010 through 2014 dropped last week to $52 billion; it had earlier been estimated at $60 billion.
While failures are still occurring at a fairly brisk pace, it is now mostly smaller institutions, like community banks, that have been collapsing.