Bank closures well behind rate for last year

WASHINGTON -- Regulators on Friday shut down two small banks in Florida and one in Colorado, bringing to 58 the number of U.S. bank failures this year, well behind last year's pace.

The Federal Deposit Insurance Corp. seized Southshore Community Bank in Apollo Beach, Fla., LandMark Bank of Florida in Sarasota, Fla., and Bank of Choice in Greeley, Colo.

Southshore Community Bank had about $46.3 million in assets and $45.3 million in deposits. LandMark Bank had about $275 million in assets and $246.7 million in deposits. That lifts to nine the number of lenders to collapse this year in Florida.

American Momentum Bank, based in Tampa, Fla., agreed to assume all of the deposits from the two banks and to buy essentially all of their assets.

In Colorado, Bank of Choice had roughly $1.07 billion in assets and $924.9 million in deposits. It is the fifth bank to fail this year in Colorado.

Bank Midwest, N.A., based in Kansas City, Mo., agreed to assume all of Bank of Choice's deposits and buy roughly $853 million of its assets.

The failures are expected to cost the deposit insurance fund $331.4 million.

The pace of bank failures has slowed this year as lenders work their way through piles of bad debt. A slow, but improving U.S. economy also has helped stem the number of bank casualties. By July 23 of last year, regulators had closed 103 banks.

In all of 2010 regulators seized 157 banks, the most in a year since the savings-and-loan crisis two decades ago. The FDIC has said 2010 likely marked the peak for bank failures from the Great Recession.

There were 140 bank failures in 2009, costing the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks involved were smaller on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.

From 2008 through 2010, bank failures cost the fund $76.8 billion. The deposit insurance fund fell into the red in 2009. With failures slowing, the FDIC's deficit narrowed in the first quarter of this year; it stood at about $1 billion as of March 31.

Depositors' money -- insured up to $250,000 per account -- is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted last July.