Regulators on Friday shut down four more banks, including one in Idaho, boosting the number of failures this year to 29 – more bank closures than in all of last year.
The latest banks seized were First Bank of Idaho, American Southern Bank in Georgia, Michigan Heritage Bank and First Bank of Beverly Hills in California.
The Federal Deposit Insurance Corp. will continue to insure deposits at American Southern Bank, Michigan Heritage Bank, and First Bank of Idaho. The FDIC will pay out the insured deposits of First Bank of Beverly Hills. Regular deposit accounts are insured up to $250,000.
First Bank of Idaho, based in Ketchum, had about $488.9 million in assets and $374 million in deposits as of Dec. 31. The FDIC said the bank’s deposits, excluding $112.8 million in brokered deposits, will be assumed by U.S. Bank of Minneapolis. The FDIC will pay the brokers directly for the amount of their funds.
First Bank of Idaho had seven branches in Idaho and Wyoming. All seven offices will reopen on Monday as branches of U.S. Bank.
The list of bank failures is growing as falling home prices and rising unemployment cause more individuals and businesses to default on their debt.
The failures have sapped billions from the deposit insurance fund. It now stands at its lowest level in nearly a quarter-century, $18.9 billion as of Dec. 31, compared with $52.4 billion at the end of 2007.
The FDIC expects that bank failures will cost the insurance fund about $65 billion through 2013.
The 29 bank collapses this year follow 25 failures in 2008, which included two of the biggest savings and loans, Washington Mutual Inc. and IndyMac Bank. Last year’s total was more than in the previous five years combined and up from only three failures in 2007.
The FDIC had 252 banks and thrifts on its list of troubled institutions at the end of 2008, up from 171 in the third quarter.