WASHINGTON — Federal and state regulators shut their third bank of the evening late Friday, closing $299.4 million-asset America West Bank in Layton, Utah.
The Federal Deposit Insurance Corp., which was appointed receiver of the institution, entered into a purchase and assumption agreement with Cache Valley Bank in Logan, Utah, to assume all the deposits of America West.
Cache Valley paid a discount of $352,000 to acquire all the $284.1 million in deposits of the failed bank, and agreed to purchase approximately $10.9 million in assets, with a 30-day option to purchase loans at book value. The FDIC will retain any remaining assets for later disposition.
The failure was expensive, given its size, and was estimated to cost the Deposit Insurance Fund $119.4 million – more than one third of the bank’s overall size.
But it was hardly the most expensive failure of the night. Earlier on Friday, regulators shut $4.1 billion-asset Silverton Bank of Atlanta. That failure was estimated to cost $1.3 billion, the fourth costliest failure in the past year. The FDIC created a bridge bank to continue operation of Silverton.
Just after Silverton’s closure, regulators announced that they had shut $45.1 million-asset Citizens Community Bank in Ridgewood, N.J. The FDIC entered into a purchase and assumption agreement with North Jersey Community Bank of Englewood Cliffs to assume all $43.7 million deposits of the bank.
The FDIC estimated that the cost to the DIF will be $18.1 million.
Overall, it has been a busy – and expensive – week for the FDIC. It has closed seven banks in the past week, with an estimated total cost to the DIF of $2.1 billion.
America West was the 32nd failure this year – already higher than last year’s 25 total collapses.
