It seemingly happens every Friday evening.
Federal regulators announce that some small bank cannot continue on its own and a rival is brought in to take over the assets and continue as if nothing had happened.
Last Friday was no different. At least four more banks were shut down by regulators, including two in California and two in Georgia.
This brings the total for the year to 22. Last year regulators closed down 157 banks due to bad loans and a slowly recovering economy, up from 140 in 2009.
At the current pace, more than 130 banks could be closed for the full year, suggesting that although the economy is recovering and short term rates are very low, banks saddled with underperforming loans are still struggling.
On Friday, Napa, Calif.-based Charter Oak Bank was closed today by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. Novato, Calif.-based Bank of Marin agreed to assume all of the deposits of Charter Oak.
As of December 31, 2010, Charter Oak Bank had about $120.8 million in total assets and $105.3 million in deposits. The FDIC will retain $28.5 million of the assets for later disposition.
San Luis Trust Bank, FSB, of San Luis Obispo, Calif. was closed today by the Office of Thrift Supervision. First California Bank agreed to assume all of the deposits of San Luis Trust. As of December 31, 2010, San Luis Trust had $332.6 million in assets and $272.2 million in deposits.
Springfield, Ga.-based Citizens Bank of Effingham was closed by the Georgia Department of Banking and Finance. Albany, Ga.-based HeritageBank of the South agreed to assume all of the deposits of Citizens. As of December 31, Citizens had $214.3 million in assets and $206.5 million in deposits.
Habersham Bank of Clarkesville, Ga. was closed today by the Georgia Department of Banking and Finance. SCBT National Association of Orangeburg, S.C. agreed to assume all of the deposits of Habersham Bank. As of December 31, Habersham Bank had $387.6 million in total assets and $339.9 million in deposits.
According to published report, bank failures in 2009 cost the insurance fund about $36 billion and about $21 billion. The losses were smaller last year because the banks that failed were much smaller.
Although the number of failed banks seems to be coming down, the number of banks on the FDIC's "problem" list stood at 860 in the third quarter of 210, according to reports, the highest number since 1993 on the heels of the savings-and-loan crisis.