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Regulators Shut Down Banks InStates

Regulators Shut Down Banks In 5 States

WASHINGTON Regulators shut down a big bank in California on Friday, along with two banks in Georgia and one each in Florida, Minnesota and Washington. That brought to 15 the number of bank failures so far in 2010 atop the 140 shuttered last year in the punishing economic climate.

The failure of Los Angelesbased First Regional Bank, with nearly $2.2 billion in assets and $1.9 billion in deposits, is expected to cost the federal deposit insurance fund $825.5 million.

The Federal Deposit Insurance Corp. took over the bank as well as the others: First National Bank of Georgia, based in Carrollton, Ga., with $832.6 million in assets and $757.9 million in deposits and Community Bank and Trust of Cornelia, Ga., with $1.2 billion in assets and $1.1 billion in deposits; Florida Community Bank of Immokalee, Fla., with $875.5 million in assets and $795.5 million in deposits; Marshall Bank of Hallock, Minn., with $59.9 million in assets and $54.7 million in deposits; and American Marine Bank of Bainbridge Island, Wash., with $373.2 million in assets and $308.5 million in deposits.

First Regional Banks collapse followed the shutdown of several large California banks in the last months of 2009. California was one of the states hardest hit by the real estate market meltdown, and many banks there have suffered under the weight of soured mortgage loans. Last year saw the failure of 17 banks in the state. The FDIC retained the remaining assets for later sale. In addition, the FDIC and FirstCitizens agreed to share losses on $2 billion of the failed banks loans and other assets.

Community Southern Bank, also based in Carrollton, Ga., agreed to assume the deposits and assets of First National Bank of Georgia. The FDIC will retain the remaining assets for later sale. In addition, the FDIC and Premier American Bank owned by the investment firm Bond Street Holdings agreed to share losses on $305.4 million of Florida Community Banks loans and other assets.

Columbia State Bank, based in Tacoma, Wash., is assuming the assets and deposits of American Marine Bank.

The two shuttered banks in Georgia followed 25 bank failures there last year, more than in any other state.

The governments resolution of First National Bank of Georgia is expected to cost the deposit insurance fund $260.4 million. That of Community Bank and Trust is estimated to cost $354.5 million. Florida Community Banks resolution is expected to cost the fund $352.6 million and Marshall Bank is expected to cost $4.1 million. The hit to the fund from American Marine Bank is estimated at $58.9 million.

As the economy has soured, with unemployment rising, home prices tumbling and loan defaults soaring, bank failures have accelerated and sapped billions out of the federal deposit insurance fund. It fell into the red last year.

The 140 bank failures last year were the highest annual tally since 1992, at the height of the savings and loan crisis. They cost the insurance fund more than $30 billion. There were 25 bank failures in 2008 and just three in 2007.

The number of bank failures is expected to rise further this year. The FDIC expects the cost of resolving failed banks to grow to about $100 billion over the next four years.

The agency last year mandated banks to prepay about $45 billion in premiums, for 2010 through 2012, to replenish the insurance fund.

Depositors money insured up to $250,000 per account is not at risk, with the FDIC backed by the government. Besides the fund, the FDIC has about $21 billion in cash available in reserve to cover losses at failed banks.

Banks have been especially hurt by failed real estate loans, both residential and commercial. Banks that had lent to seemingly solid businesses are suffering losses as buildings sit vacant. As development projects collapse, builders are defaulting on their loans.

If the economic recovery falters, defaults on the highrisk loans could spike. Many regional banks hold large concentrations of these loans. Nearly $500 billion in commercial real estate loans are expected to come due annually over the next few years.

In his State of the Union address this week, President Barack Obama said he will initiate a $30 billion program to provide money to community banks at low rates, if they boost lending to small businesses. The money would come from balances left in the $700 billion bailout fund.

Hundreds of banks, including major Wall Street institutions, received taxpayer support through that politically unpopular rescue program, enacted by Congress in October 2008 at the height of the financial crisis.

And this doesnt smell fishy to anyone? Chartered just last week and surprise a bank gets seized and was given to American Bank. I dont think it would take an economist or a genius to figure out something is just not right with this picture. How solvent is a bank that just gets chartered last week? Oh and lets see who owns them, owned by the investment firm Bond Street Holdings.

Legal Tender Why? Because they told you so? A contract a simple piece of paper Thats all you got somebodys word its good What was it worth 10 yrs ago? what is it worth now? because you were told what its worth Your entire worth is what somebody else says it is and ill tell you point blank these are the same idjiets that say me and my people arnt worth any more then to develope there drugs on there guineerats But hey you walk around with a plasticcard and a wad of paper and act like your something in that system So one must ask Whos the bigger idjiets us for allowing it or them for doing it? and you wonder why they can be so ev!l they torture people knowing full well it doesnt get anything Behold your GD on earth. If you were inside of Hati or NewO at the very time they were struck What good would that plastic and wad of paper done you? Weird how a people can base there worth on a wad of paper and plastic. WE have to be the laughing stock of the universe. WE shall find out soon How well your GD will