Bank Failure Friday Claims 3 More Banks

Only three banks failed this week, bringing the year total to 72. FDIC should be close to running out of insurance funds soon. Rumors of a big bank failure coming soon are circulating. This bank failure would surely wipe out FDIC forcing it to go to Congress for the first of many taxpayer funded bailouts.-Lou

U.S. bank failures rise to 72 in 2009
Regulators seize three banks in Florida and Oregon

WASHINGTON (MarketWatch) -- Regulators on Friday shut three banks in Florida and Oregon, bringing the number of U.S. bank failures to 72 for the year.

Florida regulators closed Community National Bank of Sarasota County in Venice, Fla., and First State Bank of Sarasota, Fla. Stearns Bank, N.A., of St. Cloud, Minn., will assume the deposits of both failed banks.

The failures bring the state's 2009 total to six.

Home Federal Bank of Nampa, Idaho, will buy all deposits of the failed Community First Bank of Prineville, Ore.

Bank failures have surged this year as a lingering recession and rising unemployment leaves the industry nursing heavy loan losses.

More than 1,000 banks may fail during the next three to five years, analysts at RBC Capital Markets estimated in February. See story on future bank failures.

Florida lenders have been particularly prone to failure this year, reflecting the surplus of unsold condos and other real estate in the Sunshine State. See Miami's Vise.

First State had $463 million in assets and deposits of about $387 million at the end of May.
Stearns Bank is assuming most of First State's deposits and agreed to buy roughly $451 million of the failed bank's assets, the FDIC said after the markets closed.

About $8 million of brokered deposits won't be assumed by Stearns. Instead, the FDIC said it will pay brokers directly for those funds, so customers who put savings with these brokers should contact them directly.

Stearns and the FDIC will share losses on about $364 million of the assets, the regulator noted. The closure of First State will cost the FDIC's Deposit Insurance Fund $116 million, according to regulators.

Community National had $97 million in assets and deposits of roughly $93 million at the end of May.

Stearns agreed to pay the FDIC a premium of 0.25% to assume all of Community National's deposits. Stearns is also buying $94 million of the failed bank's assets.

Stearns and the FDIC will share losses on roughly $79 million of Community National's assets. The closure will cost the Deposit Insurance Fund $24 million, the regulator estimated.

Community First Bank had total assets of $209 million as of July 5, and total deposits of about $182 million. In addition to assuming all deposits of Community First Bank, Home Federal Bank will buy about $197 million of assets, the FDIC said.

The FDIC will also share losses on about $155 million of Community First's assets. The cost to the insurance fund will be $45 million, the FDIC estimated.