State and federal regulators on Friday shut down four more banks, bringing to 57 the number of U.S. banks and savings and loan associations that have failed during 2009. All but one of the failed banks were included in TheStreet.com's recent list of 89 undercapitalized banks and thrifts. So far, 18 of the undercapitalized institutions listed on May 28 have failed. All four of the failed institutions were overwhelmed by nonperforming construction and commercial real estate loans, following the pattern of the majority of this year's bank failures.
The Georgia Department of Banking and Finance shut down First Piedmont Bank of Winder, Ga. and appointed the Federal Deposit Insurance Corp. receiver. The FDIC sold all the failed institution's deposits and branches to First American Bank and Trust of Athens, Ga. South Dakota regulators closed BankFirst of Sioux Falls, S.D. The FDIC was appointed receiver and sold all of BankFirst's deposits and branches to Alerus Financial of Grand Forks, N.D. The Office of the Comptroller of the Currency took over Vineyard Bank of Rancho Cucamonga, Calif. and appointed the FDIC receiver. The FDIC then sold all of the failed bank's retail deposits and branches to California Bank & Trust of San Diego, which is a subsidiary of Zions Bancorporation ( ZION). Lastly, California regulators shuttered Temecula Valley Bank of Temecula, Calif., which was held by Temecula Valley Bancorp ( TMCV). The FDIC was appointed receiver and sold the failed bank's retail deposits to First-Citizens Bank and Trust of Raleigh, N.C. First-Citizens is a subsidiary of First Citizens Bancshares ( FCNCA). All previous bank failures since the beginning of 2008 are detailed on TheStreet.com's interactive bank failure map:
With 15 bank and thrift failures during 2008 and 2009, Georgia ranks first among U.S. states, followed by California and Illinois with 13 failures each, Florida with five and Nevada with four. Besides Zions Bancorporation, large bank holding companies that have acquired failed institutions during 2008 and 2009 include J.P. Morgan Chase ( JPM), which acquired Washington Mutual, the largest-ever bank or thrift to fail in the U.S.; SunTrust Banks ( STI); Regions Financial ( RF); Fifth Third Bancorp ( FITB); U.S. Bancorp ( USB); and BB&T ( BBT).
While that second capital ratio reflects loan quality to some extent, BankFirst had an extremely high level of problem loans, with a nonperforming assets ratio of 43.68% as of March 31. After acquiring the failed bank's deposits and branches, Alerus Financial made a separate agreement for BankFirst's Sioux Falls office to be operated as a branch of First Dakota National Bank, of Yankton, S.D. BankFirst's other office, in Minneapolis, will reopen as a branch of Alerus Financial. Both branches will reopen Monday. BankFirst had total assets of $275 million and total deposits of $254 million. Alerus Financial agreed to acquire $72 million of the failed bank's assets, consisting of securities and loans collateralized with deposits. The FDIC made a separate arrangement to sell $177 million of BankFirst's loans to Beal Bank Nevada, of Las Vegas. Beal Bank amassed a very high level of capital before and during the early stages of the real estate crisis, as CEO Andrew Beal pursued a strategy of waiting to purchase heavily discounted nonperforming real estate loans from troubled lenders.
California Bank & Trust also acquired $1.8 billion in assets from the FDIC receivership. The FDIC agreed to share in losses on $1.5 billion of the acquired assets. Vineyard's 16 offices will reopen Monday as California Bank & Trust branches. The FDIC estimated the cost to its deposit insurance fund would be $579 million.