November 7, 2010

Bank Failures in 2010 Are Most in a Year Since S&L Crisis

Four more shuttered on Friday; 143 is now total for the year

On Friday the FDIC closed four more banks, bringing 2010’s total to 143—three more than in 2009 and the most since the savings and loan crisis some 20 years ago.

K Bank, based in Randallstown, Md., with $538.3 million in assets, was shuttered, with M&T Bank, of Buffalo, N.Y., taking over its deposits and $410.8 million of its assets. The FDIC and M&T Bank will share losses on $289 million of K Bank's loans and other assets; the bank’s failure will cost the deposit insurance fund $198.4 million.

Pierce Commercial Bank, of Tacoma, Wash., with $221.1 million in assets, is being taken over by Heritage Bank, based in Olympia, Wash., which will assume its deposits.

California lost two banks Friday: Western Commercial Bank in Woodland Hills, with $98.6 million in assets, and First Vietnamese American Bank in Westminster, with assets of $48 million, were both closed by the FDIC. First California Bank, in Westlake Village, Calif., is acquiring Western Commercial Bank’s assets and deposits, while those of First Vietnamese American Bank will be taken over by Grandpoint Bank in Los Angeles. The FDIC and First California Bank will share losses on $83.9 million of Western Commercial Bank's assets.

The deposit insurance fund will lose $25.2 million on Western Commercial Bank; $21.3 million on Pierce Commercial Bank; and $9.6 million on First Vietnamese American Bank. Its losses in 2010, however, have so far amounted to $21 billion this year; in 2009 it was $36 billion.

According to an Associated Press report, California has lost 12 banks this year; community banks are suffering as bad loans continue to surface and the economy suffers.

Read more about bank closings at AdvisorOne.com.

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