Four More Small Banks Fail

The shakeout among community banks accelerated, as regulators in the U.S. closed four institutions Friday, bringing total number of failed banks and savings and loans in 2009 to 13.

The Nebraska Department of Banking and Finance closed Sherman County Bank of Loup City and appointed the Federal Deposit Insurance Corp. receiver. The FDIC then sold all of the failed bank's deposits and some of its assets to Heritage Bank, of Wood River, Neb.

Florida bank regulators shut down Riverside Bank of the Gulf Coast of Cape Coral with the FDIC (as receiver) selling the failed institution's retail deposits to TIB Bank of Naples, Fla. TIB Bank is held by TIB Financial Corp (TIBB)).

State regulators seized Corn Belt Bank and Trust of Pittsfield, Ill. The FDIC was named receiver and arranged for all of Corn Belt's retail deposits to be taken over by Carlinville National Bank, of Carlinville, Ill.

Friday's last failure was Pinnacle Bank of Beaverton, Ore. State regulators took over the bank and appointed the FDIC as receiver. The bank's deposits were then purchased by Washington Trust Bank of Spokane, Wash., along with most of its assets.

Please see TheStreet.com's Bank Failure Roundup for a summary of all previous bank and S&L failures during 2008 and 2009.

Sherman County Bank

In a press release announcing the failure of Sherman County Bank, state regulators cited a previous order for the bank to raise more capital, and the institution's failed efforts to do so. The regulators provided no other information.

TheStreet.com Ratings had assigned Sherman County Bank a D+ (Weak) financial strength rating in September. Still, the closing of the institution was a surprise, because Sherman County Bank was still considered well capitalized under ordinary regulatory guidelines with a tier 1 leverage ratio of 8.96% and a risk-based capital ratio of 10.74%, as of Dec. 31. These ratios need to be at least 5% and 10%, respectively for a bank to be considered well capitalized, under ordinary circumstances.