Three more banks failed on June 19, bringing the total to 40 institutions for the year. The Federal Depost Insurance Corp. found takers for all three. Earlier in the week the Independent Community Bankers of America came out in support of legislation that would broaden the assessment base used to support the FDIC’s Deposit Insurance Fund.
Troy, N.C.-based First Bank agreed to acquire $942 million of the assets and all of the $774 million in deposits held by Cooperative Bank, based in Wilmington, N.C., along with the failed institution’s 24 branches. The agreement includes a FDIC/First Bank loss-share deal covering $852 million in assets. The FDIC will pay brokers directly $57 million in brokered accounts. The entire transaction will cost the DIF some $217 million.
A similar deal resolved the failure of Southern Community Bank, in Fayetteville, Ga., with its $307 million in deposits and five offices going to Blairsville, Ga.’s United Community Bank, along with $364 million of assets. A loss-share transaction covers $254 of those assets; the FDIC will retain $13 million of Southern Community’s assets for now. Around $114 million will come out of the DIF as a result.
First National Bank of Anthony (Kan.) also failed on Friday; its $142.5 million in deposits went to South Hutchison, Kan.-based Bank of Kansas, along with eight branches and assets of $156.7 million. The deal includes a loss-sharing arrangement involving $130.5 million. The FDIC will hold onto $200,000 in assets for future disposition. The cost to the DIF is put at $32.2 million.
Meanwhile, the ICBA last week announced its backing for the Bank Accountability and Risk Assessment Act of 2009. The bill would broaden the FDIC assessment method to include total assets, rather than domestic assets, and it also introduce a risk-based assessment for too-big-to-fail banks. In a statement supporting the legislation, ICBA chief executive officer and president Camden Fine said: “Proportional regulation based on risk is long overdue….It’s only fair the largest financial institutions pay an additional premium.”