3 More Banks Fail as FDIC Posts Huge Losses

In what has become a familiar trend, the FDIC this Friday announced another spate of bank failures in the country. This has brought the total number  of banks to a staggering 92 bank closures. The FDIC however was quick to assure the public that all deposits were insured.

The FDIC announced on Friday that regulators have closed Chicago based Corus Bancshares Inc, Minnesota Brickwell Community Bank and Venture Bank of Lacey in Washington State. Corus Bancshares Inc. of Chicago was the largest to fail with around $7 billion in total assets.

“MB Financial Bank, National Association, Chicago, Illinois, Assumes All of the Deposits of Corus Bank, National Association, Chicago, Illinois.” (FDIC)

Chicago based Corus Bancshares Inc. was the 16^th bank failure in Illinois alone. Corus Bank was a major lender to office, condominiun and hotel projects. FDIC puts losses with this latest bank failure at $1.7 Billion. All deposits, however, will be taken over by MB Financial Bank.

With MB Financial Bank’s acquisition of all deposits, former Corus Bank account holders can expect continued services. The FDIC further assured that all deposits are insured and all depositors can have access to their money by using ATM’s or Debit Cards for their transactions. All eleven branches of Corus Bank will reopen on their next scheduled business day as branches of MB Financial Bank.

Brickwell Community Bank

The FDIC also announced on Friday that it was closing 2 smaller banks. It  announced that Brickwell Community Bank located in Woodbury, M.N., with $72 million in assets and $63 million in deposits together with Venture Bank in Lacey, W.A., with an estimated $970 million in assets and $903 million in deposits were the latest bank closures.

All Brickwell Bank deposits will be taken over by CorTrust Bank of Mitchell, S.D. The bank’s only branch will reopen this Saturday as a branch of CorTrust Bank. Along with acquiring all of Brickwell Bank’s deposits, CorTrust Bank also agreed to purchase all assets. The FDIC also announced that CorTrust Bank will share any losses from the bank’s assets.

Venture Bank

Meanwhile, First Citizens Bank and Trust Co. has announced that it will be taking over Venture Bank deposits. Venture Bank’s 18 branches will reopen on Saturday as offices of First-Citizens Bank. First Citizens Bank and Trust Co. will be acquiring $874 million of Venture’s assets. All remaining interests will be taken by the FDIC for the eventual sale. First Citizens Bank also agreed in sharing the losses for Venture Bank’s estimated $715 million in assets.

Estimates put FDIC losses for Brickwell Bank at $22 million while Venture Bank’s closure pushes it back by $298 million. These three latest bank failures alone have cost the FDIC around $2 billion. The previous months saw Guaranty Bank, the 10^th largest bank failure and the 2^nd largest this year cost the FDIC an estimated $3 billion.

It is always assuring for depositors that the FDIC exists to protect their hard-earned deposits, but the series of bank failures have put the insurance funds at very dangerous levels. Putting your savings in banks does not give them a blank check on how they wish to invest our money. Banks should sit back and brush up on how they do business if they wish to end this financial crisis.

About the banks

 

Corus Bank

Corus Bankshares, Inc., a part of the NASDAQ Financial-100 Index and the KBW Regional Banking Index, was incorporated in Minnesota in 1958 and is headquartered in Chicago, Illinois. Corus provides consumer and corporate banking products and services throu

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