Five Community Banks Fail

WASHINGTON (TheStreet) -- Regulators shut down five community banks and savings and loan associations Friday, bringing the total of number of failed U.S. banking institutions this year to nine.

All five had been previously assigned E-minus (Very Weak) financial strength ratings by TheStreet.com Ratings, and all but one were included in TheStreet.com's list of undercapitalized banks and thrifts.

Florida regulators shut down Premier American Bank of Miami and appointed the Federal Deposit Insurance Corp. receiver. The FDIC arranged for a newly chartered bank, Premier American Bank NA of Miami to assume the failed bank's $326 million in deposits and its total assets of $351 million, with the FDIC agreeing to share in losses on $300 million of the acquired assets.

The "shelf charter" that became the new Premier American Bank NA was granted to Bond Street Holdings of New York by the Office of the Comptroller of the Currency in October to allow the investor group to bid for a failed bank.

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The OCC described the shelf charter as "a new mechanism that involves the granting of preliminary approval to investors for a national bank charter," with the charter staying "on the shelf" until the investor group can acquire a "troubled institution."

Premier American Bank's four branches were scheduled to reopen Monday as branches of Premier American Bank NA. The FDIC estimated the cost to its deposit insurance fund would be $85 million.

The Missouri Division of Finance closed Bank of Leeton. The FDIC was appointed receiver and sold the failed bank's $20 million in deposits to Sunflower Bank NA of Salina, Kan. for a small premium. Bank of Leeton's office was set to reopen during normal business hours Saturday as a Sunflower branch. The FDIC retained the failed institution's assets for later disposition and estimated the cost to the insurance fund would be $8.1 million.