Regulators have shut down a total of six banks in Florida, Georgia, Illinois and Kansas, lifting to 138 the number of U.S. banks that have fallen this year as soured loans have mounted and the economy has sputtered.
The Federal Deposit Insurance Corp. on Friday took over the banks: First Bank of Jacksonville in Jacksonville, Fla., with $81 million in assets; Progress Bank of Florida, based in Tampa, with $110.7 million in assets; First National Bank of Barnesville in Barnesville, Ga., with $131.4 million in assets; Gordon Bank of Gordon, Ga., with $29.4 million in assets; First Suburban National Bank in Maywood, Ill., with $148.7 million in assets; and Hillcrest Bank, based in Overland Park, Kan., with $1.6 billion in assets.
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WASHINGTON (AP) -- Regulators on Friday shut down two small banks in Florida and two in Georgia, lifting to 136 the number of U.S. banks that have fallen this year as soured loans have mounted and the economy has sputtered.
The Federal Deposit Insurance Corp. took over First Bank of Jacksonville in Jacksonville, Fla., with $81 million in assets; Progress Bank of Florida, based in Tampa, with $110.7 million in assets; First National Bank of Barnesville in Barnesville, Ga., with $131.4 million in assets; and Gordon Bank of Gordon, Ga., with $29.4 million in assets.
Ameris Bank, based in Moultrie, Ga., agreed to assume the assets and deposits of First Bank of Jacksonville. Bay Cities Bank, based in Tampa, is buying the assets and deposits of Progress Bank. United Bank, based in Zebulon, Ga., is assuming the assets and deposits of First National Bank of Barnesville, while Morris Bank of Dublin, Ga., is assuming the deposits and $11.5 million of the assets of Gordon Bank. The FDIC will retain the rest for eventual sale.
In addition, the FDIC and Ameris Bank agreed to share losses on $60 million of First Bank of Jacksonville's loans and other assets. The FDIC and Bay Cities Bank are sharing losses on $82.6 million of Progress Bank of Florida's assets while the agency and United Bank are sharing losses on $107.3 million of First National Bank of Barnesville's assets.
The failure of First Bank of Jacksonville is expected to cost the deposit insurance fund $16.2 million; the failure of Progress Bank of Florida is expected to cost $25 million; that of First National Bank of Barnesville, $33.9 million; and that of Gordon Bank, $9 million.
With 136 closures nationwide so far this year, the pace of bank failures exceeds that of 2009, which was already a brisk year for shutdowns with 140. By this time last year, regulators had closed 106 banks.
The pace has accelerated as banks' losses mount on loans made for commercial property and development. Many companies have shut down in the recession, vacating shopping malls and office buildings financed by the loans. That has brought delinquent loan payments and defaults by commercial developers.
The 2009 total of bank failures was the highest annual tally since 1992, at the height of the savings and loan crisis. The 2009 failures cost the insurance fund more than $30 billion. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three succumbed in 2007.
The growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, and its deficit stood at $15.2 billion as of June 30.
The number of banks on the FDIC's confidential "problem" list jumped to 829 in the second quarter from 775 three months earlier, even as the industry as a whole had its best quarter since 2007, making $21.6 billion in net income. Banks with more than $10 billion in assets -- only 1.3 percent of the industry -- accounted for $19.9 billion of the total earnings.
The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.
The agency mandated last year that banks prepay about $45 billion in premiums, for 2010 through 2012, to replenish the insurance fund. On Tuesday, the FDIC decided against raising premiums after determining the losses from bank failures this year were lower than anticipated. The agency also proposed a new plan for ensuring that the insurance fund reaches the level mandated by Congress.
Depositors' money -- insured up to $250,000 per account -- is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July.