Eight Banks Fail, 2010 Tally Hits 50

WASHINGTON (TheStreet) -- Regulators shuttered eight banks Friday, bringing this year's tally of failed banks and thrifts to 50.

All of the failed institutions were included in TheStreet.com's list of undercapitalized banks.

TD Bank Buys Three Florida Institutions

The largest institution to fail Friday was Riverside National Bank of Florida of Fort Pierce, which had $3.42 billion in total assets when it was shut down by the Office of the Comptroller of the Currency. The Federal Deposit Insurance Corp. was appointed receiver and arranged for TD Bank, NA of Wilmington, Del., to take over the failed bank and its 58 offices.

TD Bank, NA is the main U.S. subsidiary of Toronto-Dominion Bank (TD).

Riverside was the subject of rumors earlier in the week, when local competitor Seacoast Banking Corp. (SBCF) of Stuart, Fla., raised $50 million through a preferred offering, with another $200 million pledged by private equity investors to fund the possible government-assisted acquisition of one or more failed banks. Local news reports listed Riverside as a possible target for Seacoast.

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The two other Florida failures on Friday included AmericanFirst Bank of Clermont, which was closed by state regulators and had $91 million in total assets, and First Federal Bank of North Florida, which had $393 million in total assets and was closed by the Office of Thrift Supervision. The FDIC also arranged for these to be taken over by TD Bank, NA.

The offices of the three failed Florida institutions were set to reopen during normal business hours as branches of TD Bank, NA, beginning Saturday.

The FDIC entered into a loss-sharing agreement on $2.2 billion of the assets acquired by TD Bank, NA, agreeing initially to share in 50% of losses on the acquired assets. The agency estimated the cost to the deposit insurance fund for the three failures would total $508.3 million, including $491.8 million for Riverside, $10.5 million for American First and $6 million for First Federal.

Lakeside Community Bank

The Michigan Office of Financial and Insurance Regulation closed Lakeside Community Bank of Sterling Heights, Mich. Since the FDIC was unable to find a buyer for the failed bank, the agency announced that checks would be mailed to customers on Monday for their insured deposit balances, except for customers with brokered deposits. For these customers, funds would be wired directly to brokers once the brokers provided documentation to the FDIC. The agency didn't say whether any deposits exceeded insurance limits. The cost to the deposit insurance fund was estimated to be $11.2 million.

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