U.s. Federal Regulators Close Three Failed Banks

[News_Editor]

U.S. federal regulators close three failed banks < br />

2012-10-20 19:26:15 GMT+7 (ICT)

WASHINGTON, D.C. (BNO NEWS) -- Federal regulators on Friday evening closed three small banks, two in Florida and one in Missouri, bringing the total number of bank failures in the United States so far this year to 46. It is significantly lower when compared to previous years.

The largest bank to be closed on Friday was the Excel Bank which had its headquarters in the Missouri city of Sedalia, about 78 miles (126 kilometers) southeast of Kansas City. The bank, which had a total of four branches across the state, was closed by the Missouri Division of Finance after its regular closing time.

After the closing, the Federal Deposit Insurance Corporation (FDIC) said it immediately entered into a purchase and assumption agreement with the Simmons First National Bank in Pine Bluff, Arkansas, to assume all of the deposits of Excel Bank. As of June 30, Excel Bank had approximately $200.6 million in total assets and $187.4 million in total deposits.

Most customers should see no or little service disruption despite the closure of the institution as the four branches of Excel Bank will reopen during their normal business hours on Saturday as branches of Simmons First National Bank, and all depositors of Excel Bank will automatically become depositors of Simmons First National Bank.

All of the services of the failed bank, including checks, ATM and debit cards, will remain active. "Checks drawn on the bank will continue to be processed," the FDIC said in a statement which also applies to the two other banks which were closed on Friday. "Loan customers should continue to make their payments as usual."

The two other banks closed by federal regulators were the GulfSouth Private Bank in Destin, Florida, with four branches and the First East Side Savings Bank in Tamarac, Florida with only one branch. Both banks were assumed by another bank, ensuring continuing service for customers.

The FDIC estimated that the combined cost of all three bank failures to the Deposit Insurance Fund (DIF) will be around $86.1 million, but said it was the least costly resolution for the DIF compared to other alternatives. Friday's closures bring the total number of U.S. bank failures so far this year to 46, significantly lower than in recent years. There were 91 bank failures in 2011 and 157 bank failures in 2010.

-- © BNO News All rights reserved 2012-10-20

[bkk_mike]

One thing America does well is shut down failing retail banks in such a way that the customers aren't (usually) affected.

Over time, obviously, overlapping branches with the bank that took it over will get shut down, and back-office staff will be let go once the combined entities customer accounts are moved onto the same computer system.

But, in general, the only people to lose out are the FDIC (covering the difference between the insured customer deposits and the actual funds the bank had remaining), the failing bank's shareholders and bondholders, and those staff that get fired.

Edit: Added "retail" as, of course, America didn't cope as well when the investment bank, Lehman Brothers failed.

Edited October 22, 2012 by bkk_mike

[Scott]

Posts with unattributed quotes and replies have been deleted.

[mania]

But, in general, the only people to lose out are the FDIC (covering the difference between the insured customer deposits and the actual funds the bank had remaining), the failing bank's shareholders and bondholders, and those staff that get fired.

True but,

I am not so sure in the long run it will be that simple.

What has largely happened is the biggest perpetrators/manipulators of the toxic debts

have gotten off scot free & even made more money off the crisis.

In the end it is these wolves ( aka: Too Big To Fail )

that will be left standing & will hopefully not be the only choices left.

Edited October 22, 2012 by mania