Regulators closed four banks late Friday, including the largest based in New Mexico, resulting in over $500 million of losses to the Deposit Insurance Fund.
The $2.3 billion-asset First Community Bank in Taos, N.M., was the largest among the 11 institutions closed so far this year. The Federal Deposit Insurance Corp. sold its operations to U.S. Bank, the subsidiary of Minneapolis-based U.S. Bancorp.
In all, the four failed banks totaled about $3.4 billion in assets. Regulators seized the $43 million-asset First State Bank in Camargo, Okla., the $246 million-asset Evergreen State Bank in Stoughton, Wis., and the $781 million-asset FirsTier Bank in Louisville, Colo.
The FDIC said U.S. Bank would assume all of First Community's nearly $2 billion in deposits, and acquire essentially all of its assets. The failed bank's 38 branches were scheduled to open under normal hours on Saturday as part of U.S. Bank. The agency estimated the failure will cost $260 million.
However, there were no buyers for FirsTier. Instead, the FDIC set up a temporary charter – known as a Deposit Insurance National Bank – to hold the insured amount of the failed bank's $723 million in deposits, meaning uninsured customers will take losses. (The FDIC said the amount of uninsured funds was undetermined.)
The new bank, the Deposit Insurance National Bank of Louisville, will stay open for one month to allow insured depositors to access their funds and open accounts at other institutions. The failure of FirsTier was estimated to cost the agency just over $242 million.
Meanwhile, the FDIC entered into a purchase and assumption agreement with Bank 7, located in Okahoma City, for all of First State's $40 million in deposits, and essentially all of its assets. The FDIC estimated that the failure will cost the Deposit Insurance Fund $20.1 million.
McFarland State Bank in McFarland, Wis., agreed to assume all of Evergreen's $195 million in deposits and acquire roughly all of its assets. The failure was estimated to cost the FDIC nearly $23 million.