Four Banks Fail; 2011 Tally at 11

WASHINGTON ( TheStreet) -- State regulators shut down banks in four states Friday, bringing this year's tally of bank failures to 11 following 157 bank closures during 2010.

As receiver, the Federal Deposit Insurance Corp. found buyers for three of the failed institutions and estimated the bank closures would cost the deposit insurance fund a total of $545.5 million.

Two of the three failed banks had been previously included in TheStreet's Bank Watch List of undercapitalized institutions, based on third-quarter regulatory data provided by SNL Financial.

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First State Bank

Oklahoma regulators shuttered First State Bank of Camargo, Okla. on Friday. The Oklahoma State Banking Department said in a press release that State Banking Commissioner Mick Thompson had closed First State Bank because of an "exhaustion of capital as a result of significant loan losses.

The FDIC was appointed receiver and arranged for the failed bank's total assets of $43.5 million and total deposits of $40.3 million to be assumed by Bank 7 of Oklahoma City.

First State Bank's office was scheduled to reopen Monday as a branch of Bank 7 and the failed bank's customers were advised to continue using the same office until Bank 7 completed systems changes that would allow the customers to access their deposits at all of the acquiring bank's branches.

The FDIC estimated the cost of the bank failure to the deposit insurance fund would be $20.1 million.

Unlike most failing banks and thrifts, First State Bank had not appeared on TheStreet's Bank Watch List as the bank was still considered adequately capitalized under the regulatory guidelines that most banks are required to follow through the end of 2010.

The Tier 1 leverage ratio was 7.12% and the total risk-based capital ratio was 9.58% as of Dec. 31, exceeding the 4% and 8% required for most institutions to be considered adequately capitalized.

As of Dec. 31, the bank's nonperforming assets -- including nonaccrual loans, loans past due 90 days or more, and repossessed real estate -- made up 4.25% of total assets, according to preliminary regulatory data provided by SNL Financial.

However, earlier-stage delinquencies of loans past due 30 to 89 days shot up to 15.34% of total assets from 3.90% the previous quarter.

The increase in early-state delinquencies during the fourth quarter appeared to result from a regulatory examination completed October 18.

On Friday, the FDIC announced that First State Bank had entered into a consent order with the FDIC and state regulators on Dec. 21, agreeing to submit a capital plan within 30 days.

Evergreen State Bank

The Wisconsin Department of Financial Institutions closed Evergreen State Bank of Stoughton, Wis. The FDIC was appointed receiver and arranged for McFarland State Bank, of McFarland, Wis., to assume the failed bank's $246.5 million in assets and $195.2 million in deposits.

The failed bank had been included in TheStreet's Bank Watch List of undercapitalized institutions for the past two quarters.

Evergreen State Bank's four branches were set to reopen Saturday as branches of McFarland State Bank. The FDIC estimates the failure would cost the deposit insurance fund $22.8 million.

FirstTier Bank

The Colorado Division of Banking closed FirsTier Bank of Louisville, Colo. Since the FDIC, as receiver, was unable to find a buyer for the failed institution, the agency created the Deposit Insurance National Bank of Louisville to operate until February 28, giving retail customers time to move their insured checking and savings account deposits to other institutions. Secured deposits of public entities were also transferred to the deposit insurance bank.

The FDIC said it would mail checks for insured CD and IRA balances to retail customers. Depositors who opened their accounts through brokers were advised to contact their brokers directly for more information.

The agency hadn't yet determined the amount of deposits in FirsTier Bank, if any, that were exceeded insurance limits.

FirsTier Bank had been included in the Bank Watch List for four quarters and was actually negatively capitalized as of December 31.

The FDIC estimated the failure would cost the deposit insurance fund $242.6 million.

First Community Bank

The largest failure of the evening was First Community Bank of Taos, New Mexico, which had $2.3 billion in total assets when it was closed by state regulators. The FDIC arranged for U.S. Bank, NA -- the main subsidiary of U.S. Bancorp ( USB) to assume the failed bank's assets and its total deposits of $1.9 billion.

First Community Bank had been included in the Bank Watch List for three quarters.

The failed bank's 38 branches were scheduled to reopen during normal business hours as branches of U.S. Bank, NA. The FDIC estimated the failure would cost the deposit insurance fund $260 million.

Thorough Bank Failure Coverage

All bank and thrift closures since the beginning of 2008 are detailed in TheStreet's interactive bank failure map:

The bank failure map is color-coded, with the states having the greatest number of failures highlighted in dark gray, and states with no failures in light green. By moving your mouse over a state you can see its combined 2008-2011 totals. Then click the state to open a detailed map pinpointing the locations and providing additional information for each bank failure.

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-- Written by Philip van Doorn in Jupiter, Fla.

>To contact the writer of this article, click here: Philip van Doorn.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., 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.

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