Bank Failures in the U.S.

Omni National Bank in Atlanta Fails, Bringing 2009 Total to 21

March 27, 2009

Fox Business - The Omni National Bank of Atlanta was closed today as regulators took over the institution. It was the 21st bank failure this year (4 were in Georgia). Omni National Bank of Atlanta was ordered closed by the Office of the Comptroller of the Currency and the FDIC was named as receiver. The bank had six branches Atlanta, Dalton, Tampa FL, Chicago, Dallas, and Houston. The cost to the FDIC will be approximatley 290 million. Suntrust Bank will handle the deposits and accounts on hand until April 27. Those with amounts over 250,000 should contact the FDIC at 800-830-3250.

Regulators Close 3 Banks, Bringing 2009 Total to 20 (Total of 47 Since 2008)

March 20, 2009

CNNMoney.com - Bank regulators closed three banks Friday, marking the 18th, 19th and 20th failures this year. The FDIC estimates that the combined cost of the bank failures to its deposit insurance fund will be approximately $207 million.

The announcements mark the ninth week in the past ten that bank failures have been reported. FirstCity Bank, based in Stockbridge, Ga., with $297 million of assets and $278 million of deposits as of March 18, was closed by state regulators, according to the Federal Deposit Insurance Corp., which was named the receiver.

The FDIC, unable to find a bank to take the assets of FirstCity, said on Monday it will mail the bank's former customers checks to cover insured funds. A message on First City's Web site said that "an assuming bank could not be located."

According to an FDIC representative, the assets of the failed bank in Georgia were not attractive to buyers. "There was no franchise value," wrote David Barr, spokesperson for the FDIC, in an email. "More than half the deposits were out of area and the assets were highly concentrated in development loans. We had interest until they saw the deposit and asset makeup."

Direct deposits from the federal government - like Social Security and veterans payments - to First City account holders will go directly to SunTrust Bank. First City customers with brokered deposits need to be in touch with their brokers. The FDIC will reimburse insured, brokered deposits after the brokers provide the FDIC with the appropriate documentation.

The FDIC fully insures individual accounts up to $250,000 through the end of 2009. When the bank was closed down, the failed bank had about $778,000 in deposits that exceeded the insurance limits, according to the FDIC, although that total could fluctuate as the FDIC hears from the customers.

The FDIC estimates the bank failure will cost its fund approximately $100 million.

Freedom Bank of Georgia Fails; 17th Failure This Year

March 6, 2009

Fox Business - Freedom Bank of Georgia, located in Commerce, Ga., was closed Friday evening. The Federal Deposit Insurance Corp. was appointed receiver, and Northeast Georgia Bank of Lavonia, Ga., has agreed to assume all his deposits. Freedom Bank had four branches, all of which will reopen on Monday as branches of Northeast Georgia Bank.

As of March 4, Freedom Bank of Georgia had assets $173 million and deposits of $161 million. In addition to assuming all of the deposits of the failed bank, the FDIC said in a press release, Northeast Georgia Bank agreed to purchase approximately $167 million in assets at a discount of $13.65 million.

Northeast Georgia Bank will share with the FDIC in any losses on approximately $96.5 million in assets covered under the agreement. Still, the FDIC estimated that the cost to the Deposit Insurance Fund of the operation will be $36.2 million.

Senate to Give FDIC Up to $500 Billion

March 6, 2009

Wall Street Journal - Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department...

FDIC Warns U.S. Bank Deposit Insurance Fund Could Tank

March 5, 2009

AFP – The US government is warning banks that its deposit insurance fund could go broke this year as bank failures mount.

The head of the Federal Deposit Insurance Corporation, Sheila Bair, in a letter to bank chief executives dated March 2, defended the FDIC's plan to raise fees on banks and assess an emergency fee to shore up the fund and maintain investor confidence. Bair acknowledged the new fees, announced Friday, would put additional pressure on banks at time of financial crisis and a deepening recession, but insisted they were critical to keep the insurance fund solvent and protect. "Without these assessments, the deposit insurance fund could become insolvent this year," Bair wrote.

The FDIC chief said in the letter that the rapidly deteriorating economic conditions raised the prospects of "a large number" of bank failures through 2010. "Without substantial amounts of additional assessment revenue in the near future, current projections indicate that the fund balance will approach zero or even become negative," she wrote.

The FDIC last Friday announced it would impose a temporary emergency fee on lenders and raise its regular assessments to shore up the rapidly depleting deposit insurance fund that insures individual customer deposits up to 250,000 dollars.

A week ago the FDIC reported a sharp depletion of the deposit insurance fund in the fourth quarter due to actual and anticipated bank failures, to 19 billion dollars from 34.6 billion in the third quarter. The FDIC said it had set aside an additional 22 billion dollars for estimated losses on failures anticipated in 2009.

FDIC Agrees to Trim New Bank Fees