SAN FRANCISCO
(MarketWatch) — The pace of the ongoing credit crisis quickened
significantly Friday, March 20, when regulators seized three banks and placed two
large corporate credit unions into conservatorship, citing a need to
"stabilize the corporate credit union system."
Banks in Colorado, Georgia and Kansas were closed by regulators,
bringing the number of bank failures this year to 20, while the
National Credit Union Administration Board seized corporate credit
unions in California and Kansas that have a combined $57 billion in
assets. Corporate credit unions are chartered to act as a sort of
clearinghouse for the credit unions that serve consumers.
bringing the number of bank failures this year to 20, while the
National Credit Union Administration Board seized corporate credit
unions in California and Kansas that have a combined $57 billion in
assets. Corporate credit unions are chartered to act as a sort of
clearinghouse for the credit unions that serve consumers.
The Federal Deposit Insurance Corporation said that Stockbridge,
Ga.-based FirstCity Bank was closed by regulators, adding that it will
mail checks to FirstCitys insured depositors Monday morning.
Ga.-based FirstCity Bank was closed by regulators, adding that it will
mail checks to FirstCitys insured depositors Monday morning.
The failed banks direct deposits from the federal government such as
Social Security and veteranspayments will be transferred to SunTrust
Banks Inc. (STI:![]()
STI,
,
)
,
the FDIC said. FirstCity had $297 million in assets and $278 million in
deposits as of March 18, the FDIC reported. It also had roughly
$778,000 in deposits that exceeded the federal deposit-insurance limit
of $250,000.
Social Security and veteranspayments will be transferred to SunTrust
Banks Inc. (STI:
,
)
,
the FDIC said. FirstCity had $297 million in assets and $278 million in
deposits as of March 18, the FDIC reported. It also had roughly
$778,000 in deposits that exceeded the federal deposit-insurance limit
of $250,000.
FirstCity becomes the eighth Georgia-based bank to fail since the
economy began sliding into crisis last August, according to FDIC data.
The last Georgia bank to fail was Freedom Bank of Georgia on March 6,
the regulator said. It estimated the cost of FirstCitys failure to the
deposit insurance fund as roughly $100 million.
economy began sliding into crisis last August, according to FDIC data.
The last Georgia bank to fail was Freedom Bank of Georgia on March 6,
the regulator said. It estimated the cost of FirstCitys failure to the
deposit insurance fund as roughly $100 million.
The FDIC also said Colorado Springs-based Colorado National Bank was
closed, and Texas-based Herring Bank will assume all of the failed
banks deposits.
closed, and Texas-based Herring Bank will assume all of the failed
banks deposits.
Colorado National had $123.5 million in assets as of Dec. 31, and $82.7
million in deposits, the FDIC said. It estimated the cost of Colorado
Nationals failure to the deposit insurance fund as roughly $9 million.
million in deposits, the FDIC said. It estimated the cost of Colorado
Nationals failure to the deposit insurance fund as roughly $9 million.
Paola, Kan.-based Teambank also was closed by regulators, the FDIC
said, while Missouri-based Great Southern Bank will assume its
deposits.
said, while Missouri-based Great Southern Bank will assume its
deposits.
Teambank had $669.8 million in assets as of Dec. 31, and $492.8 million
in deposits, the FDIC said. It estimated the cost of Teambanks failure
to the deposit insurance fund as roughly $98 million.
in deposits, the FDIC said. It estimated the cost of Teambanks failure
to the deposit insurance fund as roughly $98 million.
Meanwhile the National Credit Union Administration said Lenexa,
Kan.-based U.S. Central Federal Credit Union and San Dimas,
Calif.-based Western Corporate were placed into conservatorship "to
protect retail credit union deposits and the interest of the National
Credit Union Share Insurance Fund."
Kan.-based U.S. Central Federal Credit Union and San Dimas,
Calif.-based Western Corporate were placed into conservatorship "to
protect retail credit union deposits and the interest of the National
Credit Union Share Insurance Fund."
U.S. Central has roughly $34 billion in assets and WesCorp has $23 billion in assets, the NCUA said.
The NCUA said that service continues uninterrupted at both large
corporate credit unions, and members are free to continue making
deposits and accessing funds.
corporate credit unions, and members are free to continue making
deposits and accessing funds.
"Credit unions that serve consumers remain very strong, with net worth
exceeding 10 percent of assets, healthy growth in assets, membership,
and loan portfolios despite the difficult economy," according to the
regulator.
exceeding 10 percent of assets, healthy growth in assets, membership,
and loan portfolios despite the difficult economy," according to the
regulator.
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