Regulators seize 2 banks; 94 failures this year

model_toys_Peterbilt_387_Flatbed_w_Farmn_Tractor.summ

model_toys_Weserhutte_W180_drag_line.summ By Bob L: News As I See It

If this keeps up people better start taking their money out of these banks, the way it looks id they are trying to control banks so they can see how much money you have so they know how to tax every American. How many more banks are they going to close.
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AP
By STEPHEN BERNARD, AP Business Writer

NEW YORK – Regulators shut down two banking units of Irwin Financial Corp. Friday, marking the 93rd and 94th failures this year of federally insured banks.

The Federal Deposit Insurance Corp. was appointed receiver of Louisville, Ky.-based Irwin Union Bank FSB and Columbus, Ind.-based Irwin Union Bank and Trust Co.

As of Aug. 31, Irwin Bank FSB had $493 million in assets and $441 million in deposits, while Irwin Union Bank and Trust had $2.7 billion in assets and $2.1 billion in deposits.

The FDIC said Friday both bank’s deposits will be assumed by First Financial Bank in Hamilton, Ohio.

First Financial also agreed to purchase essentially all of the two banks’ assets. The FDIC and First Financial Bank reached a loss-share agreement covering about $2.5 billion of the two banks’ combined assets.

The 27 combined branches of Irwin Union Bank FSB and Irwin Union Bank and Trust will be reopened during their normal business hours beginning Saturday as branches of First Financial Bank.

The FDIC estimates the failure of the two banks will cost its insurance fund about $850 million.

Hundreds more banks are expected to fail in the next few years largely because of souring loans for commercial real estate. The number of banks on the FDIC’s confidential “problem list” jumped to 416 at the end of June from 305 in the first quarter. That’s the highest number since June 1994, during the savings-and-loan crisis.

Last month, Guaranty Bank became the second-largest U.S. bank to fail this year after the big Texas lender was shut down and most of its operations sold at a loss of billions of dollars for the government to a major Spanish bank. The failure, the 10th-largest in U.S. history, is expected to cost the insurance fund an estimated $3 billion.

The sale of most of Austin-based Guaranty’s operations to the U.S. division of Banco Bilbao Vizcaya Argentaria SA, Spain’s No. 2 bank, marked the first time a foreign bank has bought a failed American bank during the current financial crisis.

The insurance fund has been so depleted by the epidemic of collapsing financial institutions that some analysts have warned it could sink into the red by the end of this year. The fund fell 20 percent to $10.4 billion at the end of June, the FDIC reported earlier this month.

That’s its lowest point since 1992, at the height of the S&L crisis. The agency estimates bank failures will cost the fund around $70 billion through 2013.

Chairman Sheila Bair said Friday the FDIC would consider tapping a line of credit with the Treasury Department. The FDIC’s fund has slipped to 0.22 percent of insured deposits, below a congressionally mandated minimum of 1.15 percent.

The FDIC board will meet at the end of the month, when it is expected discuss several options to replenish the fund. Aside from tapping the Treasury credit line, the FDIC could assess fees on banks in advance or again increase the fees banks must pay.

Congress in May more than tripled the amount the FDIC could borrow from the Treasury if needed to restore the insurance fund, to $100 billion from $30 billion.

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