Three More Banks Fail in 2009

On Friday evening, February 6, 2009 the FDIC announced the closure of three more banks: FirstBank Financial Services of McDonough, GA; Alliance Bank of Culver City, CA and County Bank of Merced, CA.  These bank failures make the seventh, eighth and ninth failure this year of a federally insured bank.  2008 was expected to be the tough year for bank failures, during all of 2008 the FDIC announced the failure of 25 banks.  That year was in fact the worst year of bank failures this decade.  Unfortunately, 2009 is shaping up to eclipse those numbers before the end of the first quarter, at this pace.  It’s expected that many more banks will be brought to a close amid the stress of plummeting home prices, growing mortgage foreclosures and tighter credit.

In the closing of FirstBank Financial Services, all deposit accounts have been transferred to Regions Bank, Birmingham, AL and the bank accounts will be available immediately.  On Monday February 9, 2008, the former FirstBank Financial Services locations will reopen as branches of Regions Bank. 

With the accounts of Alliance Bank, all deposit accounts have been transferred to California Bank & Trust, San Diego, CA and those accounts will be available immediately.  On Monday, February 9, 2009, the former Alliance Bank locations will reopen as branches of California Bank & Trust. 

All deposit accounts of County Bank have been transferred to Westamerica Bank, San Rafael, CA and will be available immediately as well.  On Saturday, February 7, the former County Bank branches that observed Saturday hours will reopen as branches of Westamerica Bank.  On Monday, February 9, the remaining former County Bank branches will reopen as branches of Westamerica Bank.

Prior to the failure, FirstBank had total assets of approximately $337 million and total deposits of $279 million.  Alliance Bank had total assets of approximately $1.14 billion and total deposits of $951 million prior to its demise. County Bank was the largest of three failures, the bank had total assets of approximately $1.7 billion and total deposits of $1.3 billion.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $206.0 million for the disposition of Alliance Bank.  The FDIC estimates the cost to the Deposit Insurance Fund will be $135 million for clean up of County Bank.  The FDIC estimates that the cost to the Deposit Insurance Fund, in the case of FirstBank, will be $111 million.  Federal regulators estimate that U.S. bank failures will cost the deposit insurance fund more than $40 billion over the next four years as the economy weakens.

Tags: Alliance Bank, bank failures, County Bank, FDIC, FirstBank Financial Services

This entry was posted on Monday, February 9th, 2009 at 9:27 am and is filed under Money Rates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.