Bay National BankThe Office of the Comptroller of the Currency shuttered Bay National Bank of Lutherville, Md. and appointed the Federal Deposit Insurance Corp. Receiver. The FDIC arranged for Bay Bank, FSB, also of Lutherville, Md., to assume the failed bank's deposits and total assets. Bay National lost $15.5 million during 2009 from elevated provisions for loan losses and very high noninterest expenses. The institution was undercapitalized as of Dec. 31, with a tier 1 leverage ratio of 2.47% and a total risk-based capital ratio of 4.90%. These ratios need to be at least 5% and 10%, respectively, for most banks and thrifts to be considered well capitalized by regulators. A first-quarter net loss of $2.6 million brought the capital ratios down to 1.62% and 3.75%, respectively, leaving the bank in an untenable position, since nonperforming assets (including loans past due 90 days or more, or in nonaccrual status, along with repossessed real estate) made up 9.85% of total assets as of March 31. > > Bull or Bear? Vote in Our Poll The failed bank's two offices were set to reopen Saturday as branches of Bay Bank, FSB. The FDIC estimated the cost to its deposit insurance fund would be $17.4 million.
Ideal Federal Savings BankThe Office of Thrift Supervision closed Ideal Federal Savings Bank of Baltimore. The FDIC was appointed receiver but failed to find a buyer for the failed institution and announced that insured deposits would be paid out to customers. The FDIC arranged for retail customer deposits to be transferred to a branch of Manufacturers & Traders Trust Co. located at 715 N. Howard Street in Baltimore. Local customers would be able to access their funds at the M&T branch from July 12 through July 24, after which the FDIC was to mail checks to customers for any remaining insured deposits. Brokered deposits were to be wired out after the FDIC received documentation from the brokers, needed to verify whether any of the deposits exceeded insurance limits.
USA BankThe New York State Banking Department closed USA Bank ( USBK) of Port Chester, N.Y. The FDIC was appointed receiver and arranged for New Century Bank of Phoenixville, Pa. to assume the failed institution's $193 million in total assets and $190 million in deposits. The FDIC agreed to share in losses on $159 million of the acquired assets. New Century Bank operates under the trade name Customers 1st Bank. USA Bank had been undercapitalized since the end of the third quarter of 2009, when the institution's nonperforming asset ratio shot up to 25.53% and the necessary loan loss provisions and losses on securities investments left it with a tier 1 ratio of 5.81% and a total risk-based capital ratio of 7.48%. Two more quarters of heavy losses left the capital ratios at 1.66% and 3.47% as of March 31. The failed bank's office was scheduled to reopen Saturday as a Customers 1st branch on Saturday. The FDIC estimated the cost to its insurance fund from USA Bank's failure would be $61.7 million.
Home National BankThe OCC took over Home National Bank of Blackwell, Okla. The FDIC then sold the failed bank's $561 million in deposits for a 0.22% premium to RBC Bank of Claremore, Okla. Home National Bank had roughly $645 million total assets when it failed. RBC Bank agreed to assume $341 million of the failed bank's assets and the FDIC arranged for another $261 million to be assumed by Enterprise Bank & Trust of Clayton, Mo., which is the main subsidiary of Enterprise Financial Services ( EFSC). The agency retained the remaining assets for later disposition and agreed to share in losses on the assets acquired by Enterprise. Home National Bank slipped to an undercapitalized status in the fourth quarter, when the institution posted a $50 million net loss, mainly from loan loss provisions. As of March 31, Home National's tier 1 leverage ratio was 2.63%, and its total risk-based capital ratio was 4.79%. Despite a slight profit for the first quarter, the situation was bleak, with a nonperforming assets ratio of 15.26%.
Ongoing Bank Failure CoverageWith the failures of Bay National Bank and Ideal Federal Savings, there have now been five bank and thrift failures in Maryland since the current wave of closures began in 2008. The largest failure in the state during this cycle was Bradford Bank of Baltimore, which failed in August and was acquired by M&T Bank Corp. ( MTB) USA Bank was New York's fourth failure since the beginning of 2008, the largest of which was Park Avenue Bank, which was acquired by Valley National Bancorp ( VLY) in March. All previous bank and thrift failures since the beginning of 2008 are detailed in TheStreet's interactive bank failure map: