Five Banks Fail, Bringing Total to 22

Willy Staley

By Willy Staley
Updated on Mon Nov 12, 2012

Five banks failed on Friday, including two in Maryland, in the busiest day the FDIC has had so far this year, and bringing the year’s total to 22. Regulators shuttered Palm Desert National Bank, of Palm Desert, Ca., Plantation Federal Bank, of Pawleys Island, S.C., HarVest Bank of Maryland, Gaithersburg, Md., Bank of the Eastern Shore, Cambridge, Md., and Inter Savings Bank, of Maple Grove, Minn.

In Minnesota, the Office of the Comptroller of the Currency shuttered Inter Savings Bank, which had just four branch locations and $473 in deposits. The FDIC, which was named receiver, found a buyer in Great Southern Bank, of Springfield, Mo, which will purchase both the assets of the failed bank and assume the deposits.

In California, Palm Desert National Bank, one of the five banks most likely to fail this year, was finally shuttered by the OCC. The FDIC found Pacific Premier Bank, of Costa Mesa, Ca., who agreed to purchase the failed bank’s assets and assume its deposits. Palm Desert National Bank had just one branch and $122 million in deposits.

In South Carolina, the OCC closed Plantation Federal Bank, of Pawleys Island, S.C. It had six branches, all of which will open on Monday as First Federal bank, which agreed to purchase the failing bank’s $486 million in assets and assume its $440 million in deposits.

In Maryland, two banks failed on Friday, and both were failed by the Maryland Commissioner of FInancial Regulation. In Gaithersburg, regulators closed HarVest Bank of Maryland, which had just four branches and $145 million in deposits. The FDIC found Sonabank, of McLean, Va., to purchase the failed bank’s $163 million in assets and its deposits.

In Cambridge, Md., regulators closed Bank of the Eastern Shore, for which the FDIC could not find a buyer. Instead, the FDIC created a new institution, called the Deposit Insurance National Bank of the Eastern Shore (DINB), to ensure customers can access their funds. The bank will reopen Monday as DINB, and will remain open until May 25, 2012, after which point the FDIC will mail checks to anyone with an account still open.

In all the banks where the FDIC did find a buyer, customers should continue to use their old branch until notified by their new bank that it has updated its systems and is ready for customers to use its facilities.

Between the five failures, total cost to the FDIC Deposit Insurance Fund will be approximately $272.6 million.

Visit here for the full list of bank failures in 2012.


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