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TheStreet Open House

Six Banks Fail; 2010 Total at 157

Stocks in this article: OZRKFUBCSMBC

Updated from 12/17/2010
Updated to include more details on the failures.

WASHINGTON ( TheStreet) -- Government authorities announced the closure of six more U.S. banks late Friday -- one in Arkansas, three in Georgia, one in Florida, and one in Minnesota -- bringing 2010's total to 157.

The failed institutions are First Southern Bank, Batesville, Ark.; United Americas Bank, NA, Atlanta; Appalachian Community Bank, F.S.B., McCaysville, Ga.; Chestatee State Bank, Dawsonville, Ga.; The Bank of Miami, NA, Coral Gables, Fla., and Community National Bank, Lino Lakes, Minn.

The Federal Deposit Insurance Corp. was named receiver in each of the failures and said that they would cost the agency's insurance fund an estimated $267.6 million.

The branches of the failed institutions are all expected to reopen on Monday as branches of their acquirers.

All but two of the failed banks were previously included in TheStreet's Bank Watch List of undercapitalized institutions, based on preliminary third-quarter regulatory data provided by SNL Financial.

The two failed banks that didn't previously appear on the Bank Watch List were First Southern Bank and Community National Bank.

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First Southern Bank

When the Arkansas State Banking Department shuttered First Southern Bank, Commissioner Candace Franks said the institution's failure was not the result of poor quality loans, but the result of an imprudent business relationship between First Southern Bank and one individual.

On Dec. 6, Arkansas Business had reported that the bank was looking to merge with another institution because it had purchased $22 million in potentially fraudulent rural improvement district bonds between December 2008 and September 2010. The FDIC was helping the bank investigate the authenticity of the bonds.

First Southern Bank had $191.8 million in total assets when state regulators took over the institution. The FDIC sold the failed bank's $155.8 million in deposits for a 0.25% premium and $152.8 million in assets to Southern Bank of Poplar Bluff, Mo. The agency retained the remaining assets for later disposition.

The acquiring bank is the main subsidiary of Southern Missouri Bancorp (SMBC).

The estimated cost of the bank failure to the FDIC's deposit insurance fund was $22.8 million.

Community National Bank

Although Community National Bank had sufficiently high capital ratios as of Sept. 30 to stay off TheStreet's Bank Watch List, it had a very high level of nonperforming loans, and the Office of the Comptroller of the Currency announced that "the bank, by resolution of its board of directors and its shareholders, consented to receivership." The institution had $31.6 million in total assets when it failed.

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