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Home | News | Government | Regulators Close Eight Banks, as 2010 Failures Hit 118
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Regulators Close Eight Banks, as 2010 Failures Hit 118

The pace of bank closings has returned to the recessionary ""norm,"" following two consecutive weeks where we saw just a single bank failure. That temporary reprieve came to an abrupt halt on Friday, as[IMAGE]

regulators shut the doors on eight community-based lenders in one fell swoop â€" four were in California, two in Florida, and one each in Illinois and Virginia.

The year's ""failed-bank tally"": now stands at 118. Friday's eight closings tied the number for the most on a single day this year, and are expected to cost the FDIC a combined $473.5 million.

The largest of the closings was Chicago's ""ShoreBank"": It had $2.16 billion in total assets, $1.54 billion in deposits, and 15 branch locations stretching into Michigan and Ohio.

Regulators agreed to sell the bank back to a team led by ShoreBank's existing management who were brought on after the Illinois lender was directed to raise more money to avoid seizure. The group of executives has given the institution a new name â€" ""Urban Partnership Bank"":|documents/HC_Press_Release.pdf. They are backed by a consortium of financial heavyweights, including Bank of America, Goldman Sachs, and Morgan Stanley, which reportedly invested about $150 million as part of the deal.

Urban Partnership Bank will pay the FDIC a premium of 0.50 percent for ShoreBank's deposits, and agreed to purchase essentially all of the assets except for the marketable securities and fixed assets. The FDIC and Urban Partnership Bank entered into a loss-share transaction on $1.41 billion of ShoreBank's assets. The Illinois bank's collapse alone is expected to cost the FDIC $368 million.


""Rabobank, N.A."": of El Centro, California, picked up two of the failed banks in California â€" ""Butte Community Bank"": in Chico and ""Pacific State Bank"": in Stockton.

Butte Community operated out of 14 branch locations, with $471.3 million in deposits and $498.8 million in assets. Pacific State had nine branch offices, with $278.8 million in deposits and $312.1 million in assets.

Rabobank will pay the FDIC a premium of 4.05 percent to assume all of the deposits of Butte Community Bank, but it did not pay the FDIC a premium for the deposits of Pacific State Bank. The FDIC and Rabobank agreed to share losses on $425.4 million of Butte Community Bank's assets, and $249.7 million of Pacific State Bank's assets.

""Los Padres Bank"": based in Solvang, California, was closed and acquired by San Diego's ""Pacific Western Bank"": in an FDIC-assisted transaction. Los Padres had 14 branch offices; $770.7 million in deposits, for which Pacific Western paid a 0.45 percent premium; and $870.4 million in total assets. The FDIC and Pacific Western Bank entered into a loss-share transaction on $579.8 million of Los Padres Bank's assets.

""Sonoma Valley Bank"": in Sonoma, California, operated three local branches, with $255.5 million in deposits and assets of $337.1 million. ""Westamerica Bank"": of San Rafael, California agreed to pay the FDIC a premium of 2.0 percent for Sonoma Valley Bank's deposits, in addition to purchasing all of the failed bank's assets.

""CenterState Bank of Florida"":, headquartered in Winter Haven, picked up the assets and deposits of both shuttered Florida institutions â€" ""Community National Bank at Bartow"": and ""Independent National Bank"": in Ocala.

Community National Bank had one branch office, total deposits of $63.7 million, and assets of $67.9 million. Independent National Bank operated four branch locations, with $141.9 million in deposits, and assets of $156.2 million.

CenterState Bank did not pay the FDIC a premium for the deposits of the two failed banks. The FDIC agreed to share losses on $51.9 million of Community National Bank's assets and $119.7 million of Independent National's assets.

""Imperial Savings and Loan"": in Martinsville, Virginia, was also seized by regulators. It operated just a single branch, with $10.1 million in deposits, and $9.4 million in assets. The failed bank was acquired by ""River Community Bank, N.A."":, also in Martinsville.

About Author: Carrie Bay

Profile photo of Carrie Bay
Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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