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Christopher Menkin
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Christopher "Kit" Menkin is of editor (, an internet trade publication for the finance/leasing industry. He has 46 years experience in the finance/leasing industry as well as being a founder of a commercial regional bank and serving on several company... More
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  • Failed Banks: Class Of 2013 0 comments
    Mar 29, 2013 12:41 PM

    By Aarti Kanjani and Robert Clark, SNL Financial

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    Regulators closed no banks Friday, March 22, leaving the year's total number of failures at four. In 2012, regulators had closed 15 banks through March 23.

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    As of March 15, the four bank failures thus far in 2013 did not involve a loss-share agreement. In 2012, the FDIC entered loss-share agreements with the buyers of 20 of the 51 closed banks. In 2011, the FDIC entered loss-share agreements with the buyers of 58 of the 92 closed banks.

    The median cost to the deposit insurance fund at the time of announcement as a percentage of the failed banks' assets was 22% in 2013, 21% in 2012 and 23% in 2011.

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    LaGrange, Ga.-based Frontier Bank (258.8 million)

    The bank was established in 1946 and had nine branches. The FDIC issued Frontier Bank a consent order on Feb. 15, 2012. Four months later, The Federal Reserve Bank of Atlanta entered into a written agreement with the bank's parent, Frontier National Corp. From 2009 to 2012, the bank lost $31.4 million. At the end of 2012, its Tier 1 ratio had fallen to 0.65%.

    It's Alabama, Not Georgia Bank Failure

    Chicago-based Covenant Bank ($58.4 million)

    The bank was established in 1977 and had its sole branch in Chicago. n November 2012, Covenant Bank disclosed the need for an immediate capital infusion. Also that month, the bank was issued a prompt corrective action directive by the FDIC. It had been issued a consent order by the FDIC in June 2011. As of Dec. 31, 2012, the bank's Tier 1 ratio was 2.19%, and its Texas ratio was 397.27%.

    African-American Religious Bank Fails in Chicago

    Andover, Minn.-based 1st Regents Bank ($49.6 million)

    The bank was established in 2001 and had its sole branch in Minnesota. The FDIC issued the bank a consent order in March 2010. As of Sept. 30, 2012, its equity capital fell to $924,000 and its Texas ratio was 612.51%.

    Mortgage Bubble Burst Takes Another Bank Down

    University Place, Wash.-based Westside Community Bank ($91.9 million)

    Westside Community operated two branches in the Tacoma, Wash., area. The bank had previously agreed to sell the company to a group of investors for $5.7 million in August 2012. The FDIC issued a prompt corrective action directive to Westside Community in June 2012. As of Sept. 30, 2012, 32.50% of the bank's assets were nonperforming.

    Bank in Washington State First to Fail in 2012

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    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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