Regulators Seize Three Midwestern Banks, Raising 2009 Failure Total to 87

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Source: WSJ

The seizures touched neighboring states Iowa, Illinois and Missouri. The largest was Vantus Bank of Sioux City, Iowa, which had assets of $458 million, deposits of $368 million and 15 branches. Great Southern Bank of Springfield, Mo. agreed to assume all deposits and purchase $387 million in assets. The Federal Deposit Insurance Corporation and Great Southern Bank agreed to share losses on an asset pool of $338 million. The FDIC has turned increasingly to loss-sharing deals as a way of encouraging healthier banks to take on the risky holdings of seized institutions.

The number of failures so far this year is the most since the savings and loan crisis in the early 1990s. The FDIC had 416 banks on its "problem list" at the end of June, up from 305 in March and the most since June 1994. Hundreds more banks are expected to fail as loans tied to real estate go bad.

The smallest failure Friday was the one-branch First Bank of Kansas City, which had assets of $16 million and deposits of $15 million. Great American Bank of De Soto, Kansas agreed to assume all deposits and purchase all assets.

n a south suburb of Chicago, regulators also seized Oak Forest, Ill.-based InBank, which had $212 million in assets, $199 million in deposits and three branches. MB Financial Bank of Chicago agreed to assume all deposits, except for certain brokered deposits, and "essentially" all of the assets, according to the FDIC. InBank, open since 1970, was the 14th Illinois bank to go down this year... The three Midwestern failures cost the FDIC insurance fund an estimated $230 million.


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