October 31, 2009

The FDIC pulled a late night announcement. Friday’s regular hours for announcing bank failures came and went with nary a peep from the FDIC. Then, bam, 9 failures in one; three in Texas, three in California, two in Illinois, and one in Arizona.

The Federal Deposit Insurance Corporation (FDIC) entered into a purchase and assumption agreement with U.S. Bank, NA, of Minneapolis, Minnesota, a wholly-owned subsidiary of U.S. Bancorp, to assume all of the deposits and essentially all of the assets of nine failed banks. The nine banks were October 30, 2009 by federal and state bank regulators, which appointed the FDIC as receiver.

The nine banks involved in today's transaction are:

#115 - Bank USA, National Association, Phoenix, Arizona;

#114 - California National Bank, Los Angeles, California;

#113 - San Diego National Bank, San Diego, California;

#112 - Pacific National Bank, San Francisco, California;

#111 - Park National Bank, Chicago, Illinois;

#110 - Community Bank of Lemont, Lemont, Illinois;

#109 - North Houston Bank, Houston, Texas;

#108 - Madisonville State Bank, Madisonville, Texas;

#107 - Citizens National Bank, Teague, Texas.

As of September 30, 2009, the banks had combined assets of $19.4 billion and deposits of $15.4 billion. The nine banks had 153 offices, which will reopen as branches of U.S. Bank. The FDIC and U.S. Bank entered into a loss-share transaction on approximately $14.4 billion of the combined purchased assets of $18.2 billion. The nine banks were subsidiaries of FBOP Corporation, Oak Park, Illinois. FBOP Corporation was not closed and was not subject to today's actions.

The FDIC estimates that the cost of the nine banks to the DIF will be a combined $2.5 billion. U.S. Bank's acquisition of all the deposits was the "least costly" resolution for the FDIC's DIF compared to alternatives. The failure of the nine banks brings the nation's total number this year to 115.

Sinclair Noe

Bank-o-meter.com

Eat the bankers

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