Regulators Seize Control of Five Community Banks

The number of regional bank closures has already begun to pick up speed. State and federal regulators shuttered five more community-based financial institutions over the weekend â€" in Florida, Missouri, New Mexico, Oregon, and Washington. There have been a total of ""nine failures so far in January"":http://www.fdic.gov/bank/individual/failed/banklist.html, a pace much in line to rival the 140 bank collapses in 2009.

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The FDIC is making moves that indicate it expects another year of elevated bank closings. The agency said last week that it is opening a satellite office in suburban Chicago to help manage receiverships and liquidate assets from failed financial institutions in the Midwest. FDIC officials say staffing will be based on the number of closings in that part of the country â€" the new facility can accommodate up to 500 temporary staff and contractors. The FDIC has already set up similar satellite offices in Irvine, California, and Jacksonville, Florida.

The closure of ""Premier American Bank"":http://www.premieramericanbank.com in Miami, Florida over the weekend marked regulators' first use of a new mechanism called a ""shelf charter."" This strategy involves the granting of preliminary approval to investors for a national bank charter. The charter remains inactive, or ""on the shelf"" until the investor group is in a position to acquire a failed institution. The Office of the Comptroller of the Currency (OCC) said that by granting the preliminary approval, it can expand the pool of new equity capital available to bid on troubled institutions.

On Friday, the OCC granted final approval for Bond Street Bank, N.A., which had received preliminary approval as a shelf charter on October 23, 2009, to establish Premier American Bank, N.A. to acquire the state-chartered Premier American Bank in Miami when it was seized by the Florida Department of Financial Services. The new institution will become a subsidiary of ""Bond Street Holdings, LLC"":http://www.bondstreetholdings.com in New York. The firm says on its Web site that it was formed to invest in banking franchises and capitalize on the dislocation in today's financial markets.

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Premier American Bank had four local branch offices, which reopened Monday morning as branches of the new Premier American Bank, N.A.; $326.3 million in total deposits; and assets worth $350.9 million. Premier American Bank, N.A. did not pay the FDIC a premium for the failed institution's deposits, and agreed to purchase ""essentially all"" of the assets. The FDIC said it will share in any losses on $300 million of the acquired assets. The Florida bank's failure will cost the agency an estimated $85 million.

""Bank of Leeton"":http://www.bankofleeton.com in Missouri was also shut down. The FDIC brokered a deal with ""Sunflower Bank, N.A."":http://www.sunflowerbank.com of Salina, Kansas to assume all of the $20.4 million in deposits of Bank of Leeton for a premium of 0.59 percent. Sunflower did not purchase any of the failed bank's $20.1 million in loan assets. The FDIC says it will dispose of the assets at a later date. Bank of Leeton's collapse will cost the federal agency an estimated $8.1 million.

""Charter Bank"":http://www.charterco.com in Santa Fe, New Mexico was acquired by Charter Bank, a newly-chartered federal savings bank based in Albuquerque, which is a subsidiary of ""Beal Financial Corporation"":http://www.bealbank.com in Plano, Texas and a sister bank to Beal Bank and Beal Bank Nevada. Charter Bank had eight branches, $851.5 million in deposits, and $1.2 billion in total assets. The FDIC has agreed to share in any future losses on $805.5 million of the failed bank's assets. The closure is expected to cost the FDIC $201.9 million. Charter Bank's collapse is the first in New Mexico in more than a decade.

The seven-branch ""Evergreen Bank"":http://www.evergreenbank.com in Seattle, Washington was closed by its state regulator and acquired by ""Umpqua Bank"":http://www.umpquabank.com of Roseburg, Oregon. Umpqua paid a premium of 1.0 percent for Evergreen's $439.4 million in deposits and agreed to purchase all of its $488.5 million in assets. The FDIC and Umpqua Bank entered into a loss-share transaction on $379.5 million of Evergreen Bank's assets. The failure will cost the FDIC an estimated $64.2 million.

""Columbia River Bank"":http://www.columbiariverbank.com in The Dalles, Oregon, was also closed by state officials. Columbia River had 21 branch offices, $1.0 billion in total deposits, and assets of $1.1 billion. ""Columbia State Bank"":http://www.columbiabank.com in Tacoma, Washington agreed to assume all deposits for a premium of 1.0 percent and purchase all of the failed institution's assets. The FDIC and Columbia State Bank will share losses on $697.4 million of the assets acquired. The Oregon bank's collapse is expected to cost the FDIC $172.5 million.