3 more banks shut down, failure tally 92

The two small banks are Brickwell Community Bank and Venture Bank of Lacy. So far, 16 banks have collapsed this year in Illinois.

This takes the total number of bank failures this year to 92, as per the Federal Deposit Insurance Corp. (FDIC). However, the good news is that this closure would not harm the customers of these banks.

Corus Bank to be acquired by MB Financial Bank
The Chicago-based Corus Bank was shut down by the Office of the Comptroller of the Currency on Friday. The bank had 11 branches and deposits of about $7 billion, the FDIC said.

All the failed deposits of the bank will now be taken over by the MB Financial Bank, also based in Chicago. Not only this, MB Financial Bank has also agreed to buy $3 billion of its assets. It is being anticipated that the FDIC will sell them off in the next 30 days.

Mitchell Feiger, chief executive of MB Financial, was quoted as saying, “This is our third FDIC transaction this year and we are pleased to provide a safe and secure home at MB for Corus customers.”

Acquisition details of other two banks
The Brickwell Community Bank in Minnesota, which used to run one branch in Woodbury, was closed by state officials. Its $63 million deposits will be taken over by Mitchell, S.D.-based CorTrust Bank. CorTrust will also buy “essentially all” of its $72 million in assets, the FDIC said.

Venture Bank of Lacy in the state of Washington, which was closed by state regulators, will be acquired by the First-Citizens Bank & Trust Company in Raleigh, N.C.

All the 18 branches of the Venture Bank will now open on Saturday as branches of First-Citizens Bank & Trust Company.

Up to July 28, Venture Bank had assets amounting to $970 million and deposits of about $903 million. However, the First-Citizens Bank has consented to buy $874 million of the assets.

More bank failures to come, FDIC warns
The number of banks that have been closed by the regulators is alarming as the statistics are almost four times higher than the number of banks that failed in 2008. The number of banks that have collapsed is also the highest since 1992, when 181 banks failed. Plus, the unemployment rate shot up to a 25-year high.

Mostly, the banks that have failed fall in the small and regional banks category. These banks had to shut shop owing to losses on real estate and consumer loans.

More bank failures are in sight and it is worrying as to how long will the FDIC funds last. With the bank failures on Friday, the FDIC had to shell out another estimated $2 billion.

According to the FDIC, over the next five years, losses due to the shutting down of insured institutions will be approximately $70 billion.