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Florida becomes the first to report a bank failure in 2011

The fourth largest populated state (13 million) Florida had 29 banks failures last year, the largest followed by Georgia with 21 (10th with 7 million), Illinois with 14 failures (6th with 11.7 million) California with 12 (1st with $31.4 million) and Washington with 11 (15 with 6 million)


 

The nine branches of First Commercial Bank of Florida, Orlando, Florida were closed with First Southern Bank, Boca Raton, Florida, to assume all of the deposits. Founded April 21, 1999, there were 87 full time employees with two branches in Orlando and a branch each at Deltona, Edgewood, Kissimmee, Lake Mary, Saint Cloud, Winter Garden, and Winter Park.

As of September 30, 2010, First Commercial Bank of Florida had approximately $598.5 million in total assets and $529.6 million in total deposits.

Net equity went from $48 million year-end 2008 to $40.2 million year-end 2009 to $12.1 million September 30, 2010.

Again it is land development and construction causing the financial problems. Perhaps the bank which was trying to raise capital and also talked about merging or opening a new branch should have been put out of their misery two years ago. The investors lost everything, and after looking at the statistics, it is easy to see why they had trouble raising sufficient capital to stay in business.

The bank lost $5,700 year-end 2008 after $17.5 million in charges offs, lost $13.5 million year-end 2009 with charge offs of $31.2 million ($16.3 million in construction and land development, $8.6 million secured by 1-5 family residential properties, $5.6 million in nonfarm nonresidential properties. $315,000 commercial and industrial loans, $302 in loans to individuals. September 30, 2010 noncurrent loans were $114,480 with the bank showing a loss of $27.88 million dollars following charge offs of $16.3 million ($10.1 million in nonfarm nonresidential property, $2.9 million in construction and land development, $1.3 million secured by 1-4 family residential properties, $1.7 million to commercial and industrial loans.
 

Tier 1 risk-based capital ratio: -2.13%

The FDIC and First Southern Bank entered into a loss-share transaction on $484.3 million of First Commercial Bank of Florida's assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $78.0 million.
http://www.fdic.gov/news/news/press/2011/pr11002.html
 


 

The two branches of Legacy Bank, Scottsdale, Arizona were closed today by the Arizona Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Enterprise Bank & Trust, St. Louis, Missouri, to assume all of the deposits of Legacy Bank.

Founded January 3, 2005, the bank had 20 full time employees at its two branches in Scottsdale.

Again, it is land development and construction that is closing the banks in Arizona, and perhaps hurting all smaller and regional banks who are unable to raise sufficient capital to survive, and perhaps should not survive as they made poor credit risk decisions compared to those who are still in business.

Bank equity dropped from year-end 2008 to 2009, from $8.5 million to $7 million as it showed a loss of $7.2 million after charges offs $5.9 million in 2008 to a loss of $8.68 million after charges offs of $6.85 million year-end 2009 ($3.3 million in construction and land development, $2.95 million in commercial and industrial loans were the primary write-offs.)
 

Tier 1 risk-based capital ratio 2.73%

Bank equity had dropped to $3.3 million September 30, 2010 with $6.6 million in noncurrent loans, a loss of $3.5 million following $3.3 million in charge offs ($1.95 million in construction and land development, $1.12 million in commercial and industrial loans and $226,000 in loans secured by 1-4 family residential property.

As of September 30, 2010, Legacy Bank had approximately $150.6 million in total assets and $125.9 million in total deposits. Enterprise Bank & Trust will pay the FDIC a premium of 1.0 percent to assume all of the deposits of Legacy Bank. The FDIC and Enterprise Bank & Trust entered into a loss-share transaction on $119.8 million of Legacy Bank's assets. Enterprise Bank & Trust will share in the losses on the asset pools covered under the loss-share agreement.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $27.9 million.
http://www.fdic.gov/news/news/press/2011/pr11003.html
 

Tracking Bank Failures Map:
http://graphicsweb.wsj.com/documents/Failed-US-Banks.html

List of Bank Failures:
http://www.fdic.gov/bank/individual/failed/banklist.html

Bank Beat:
http://www.leasingnews.org/Conscious-Top%20Stories/Bank_Beat.htm



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