Banks Fail in Six States - TheStreet

WASHINGTON (

TheStreet

) -- Regulators shut down four banks and three thrifts Friday, bringing the total number of failed institutions this year to 140.

The Federal Deposit Insurance Corporation failed to find buyers for three of the failed institutions, all of which had relatively small amounts of uninsured deposits, meaning that some depositors would take losses.

TheStreet.com Ratings

had previously assigned financial strengths ratings of E (Very Weak) or lower to all of the failed institutions except for

Independent Bankers Bank

of Springfield, Ill., which had been rated a D (Weak).

The largest failure was

First Federal Bank of California

of Santa Monica, which had $6.1 billion in total assets and $4.5 billion in deposits when it was shuttered by the Office of Thrift Supervision (OTS), following seven quarters of large losses on residential mortgages, with negative amortization on option-payment adjustable-rate mortgages contributing a significant portion of the losses.

The FDIC was appointed receiver and arranged for

OneWest Bank

of Pasadena, Calif. to take over First Federal, paying no premium for the deposits. The FDIC agreed to share in losses on $5.3 billion of the acquired assets and estimated the cost of the failure to its deposit insurance fund would be $146 million. First Federal Bank's 39 offices were set to reopen during normal business hours Saturday as OneWest branches.

This is the second major acquisition for OneWest Bank, which was newly-organized in March by an investor group led by Steven Mnuchin before purchasing the remnants of

IndyMac Bank

from the FDIC.

Other Failures

RockBridge Commercial Bank

Georgia regulators closed

RockBridge Commercial Bank

of Atlanta, which had $294 million in assets and total deposits of $292 million. The FDIC was appointed receiver, and since a buyer could not be found for the failed institution's deposits, the agency announced that the RockBridge's insured deposits would be paid out, with checks mailed on Monday to retail depositors. Customers with deposits made through brokers will need to contact their brokers, who will be paid directly by the FDIC.

The agency estimated that there were $2.1 million in deposits that were over insurance limits. When a bank or thrift fails and uninsured deposits are not acquired, any payouts of uninsured deposits to customers are called dividends. The FDIC receivership may pay an immediate dividend on uninsured deposits, which is called an "advance dividend," and other dividends may be paid as the receivership disposes of the failed institution's assets. In this case, no advance dividend was announced. The FDIC estimated the cost of RockBridge Commercial Bank's failure to the deposit insurance fund would be $124 million.

Peoples First Community Bank

The OTS took over

Peoples First Community Bank

, Panama City, Fla., and appointed the FDIC receiver. The FDIC sold the failed bank's total deposits of $1.7 billion to

Hancock Bank

of Gulfport, Miss. for a one percent premium. Hancock Bank also took on $1.4 billion of Peoples First Community's $1.8 billion in assets, with the FDIC agreeing to share in losses on the acquired assets. The 29 Peoples First Community branches were scheduled to reopen during normal business hours Saturday or Monday, as branches of Hancock Bank.

Hancock Bank is the main subsidiary of

Hancock Holding Co.

(HBHC)

.

Citizens State Bank

The Michigan Office of Financial and Insurance Regulation shut down

Citizens State Bank

of New Baltimore. The FDIC couldn't find a buyer for the failed bank's deposits and announced the creation of

The Deposit Insurance National Bank of New Baltimore

, which would remain open for about 45 days so that Citizen State's insured depositors could move their accounts to other institutions, except for CD and IRA accounts. Customers with these types of accounts were to be mailed checks for their insured balances. The FDIC estimated that approximately $803 thousand in insured deposits "potentially" exceeded insurance limits. The cost of the failure to the deposit insurance fund was estimated to be $76.6 million.

New South Federal Savings

The OTS closed

New South Federal Savings Bank

of Irondale, Ala. The FDIC was appointed receiver and arranged for

Beal Bank

of Plano, Texas, to take over the failed thrift's $1.2 billion in deposits and $1.5 billion in assets. New South's office was scheduled to reopen Monday as a Beal Bank branch and the FDIC estimated the cost of the failure to its insurance fund would be $212 million.

Independent Bankers Bank

Illinois regulators closed

Independent Bankers' Bank

of Springfield, an institution that didn't take deposits from the public, instead focusing on providing various services to other banks, including the sale of loan participations. Before it was shut down by regulators, the management of Independent Bankers' Bank was trying to sell the institution. The FDIC formed a "bridge bank" to take over the failed bank's operations and continue providing service to its roughly 450 bank customers, "to allow preexisting marketing efforts for the bank to continue." The agency estimated the cost to the insurance fund would be $68.4 million.

Imperial Capital Bank

The California Department of Financial Institutions shut down

Imperial Capital Bank

of La Jolla, which has $2.8 billion in deposits and $4 billion in total assets. The FDIC sold all of the failed bank's deposits for a small premium to City National Bank of Los Angeles, the main subsidiary of

City National Corp.

(CYN)

. City National also agreed to acquire $3.3 billion of the Imperial Capital's assets, with the FDIC sharing in losses on $2.5 billion. Imperial Capital's nine branches were scheduled to reopen Monday as City National branches and the FDIC estimated the cost to its insurance fund would be $619 million.

Ongoing Bank Failure Coverage

All previous bank and thrift failures for 2008 and 2009 are detailed in

TheStreet.com's

interactive bank failure map:

The bank failure map is color-coded, with states having the greatest number of failures highlighted in red, and states with no failures in grey. By hovering your mouse over a state you can see the combined 2008-2009 totals for each state. Then click the state top open a detailed map with pinpointing the locations and providing additional information for each bank failure.

While there have been bank and thrift failures in 34 states during 2008 and 2009, four states have combined for more than half of that total:

Georgia

leads all states with 30 bank or thrift failures during 2008 and 2009, followed by

Illinois

and

California

with 22 each, and

Florida

with 16 failures.

Large holding companies acquiring failed institutions during 2008 and 2009 have included

J.P. Morgan Chase

(JPM) - Get Report

, which acquired Washington Mutual, the largest-ever bank or thrift to fail in the U.S;

U.S. Bancorp

(USB) - Get Report

;

SunTrust Banks

(STI) - Get Report

;

Regions Financial

(RF) - Get Report

;

Fifth Third Bancorp

(FITB) - Get Report

;

Zions Bancorp

(ZION) - Get Report

; and

PNC Financial

(PNC) - Get Report

; and

BB&T

(BBT) - Get Report

.

Free Financial Strength Ratings

The FDIC's temporary increase of agency's basic limit on individual deposit insurance coverage to $250,000 from $100,000 has been extended through 2013. The agency also temporarily waived all deposit insurance limits for business transaction accounts (checking accounts). This waiver is set to expire on June 30, 2010, after which business checking accounts will go back to the $100,000 deposit insurance limit.

It will be more important than ever for business and municipal entities such as school districts to carefully monitor the health of their banks. It's very easy to have more than $100,000 of somebody else's money flowing through a business account.

TheStreet.com Ratings

issues independent and very conservative financial strength ratings on each of the nation's 8,500 banks and savings and loans. They are available at no charge on the

Banks & Thrifts Screener

.

In addition, the Financial Strength Ratings for 4,000 life, health, annuity, and property/casualty insurers are available on the

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.

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also provides award-winning stock ratings, which are available on the

Stock Ratings Screener

.

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was recently ranked the No. 1 independent stock selector during the market meltdown by BNY ConvergEx Group's BNY Jaywalk.

--

Written by Philip van Doorn in Jupiter Fla.

Philip W. van Doorn joined TheStreet.com Ratings., Inc., in February 2007. He is the senior analyst responsible for assigning financial strength ratings to banks and savings and loan institutions. He also comments on industry and regulatory trends. Mr. van Doorn has fifteen years experience, having served as a loan operations officer at Riverside National Bank in Fort Pierce, Florida, and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a Bachelor of Science in business administration from Long Island University.