MONROE/WASHINGTON - First Banking Center, including locations in Monroe, Albany, Darlington and Shullsburg, were shut down by bank regulators early Friday evening and immediately sold to an out-of-state bank.
Gerald Billings, senior ombudsman specialist for the Federal Deposit Insurance Corp., said all 17 First Banking Center locations in Wisconsin were closed by state banking regulators at 6 p.m. Friday. The bank locations were turned over to the FDIC, which in turn immediately sold all bank locations to First Michigan Bank, based in Troy, Mich.
Billings said bank locations will re-open immediately; those locations with Saturday hours will be open for business today, Nov. 20.
Furthermore, First Banking customers will see no disruption in service, Billings said. First Banking Center checks and ATM cards will continue to be honored, and direct deposits will be unaffected.
First Banking Center is based in Burlington and has $750.7 million in assets.
First Michigan Bank agreed to assume the assets and deposits of First Banking Center. In addition, the FDIC and First Michigan Bank agreed to share losses on $515.6 million of First Banking Center's loans and other assets.
The failure of First Banking Center is expected to cost the deposit insurance fund $142.6 million.
Billings said selling the bank to First Michigan is the "best scenario" for the FDIC. First Michigan has purchased other troubled banks from the FDIC, but until Friday's sale, did not have a presence in Wisconsin.
He said the reason for the bank closure is typical of other bank sales - "an excess of nonperforming commercial loans," including real estate, construction and development loans.
Troubled banks are given time to raise capitol in order to cover deficits caused by default loans, Billings said. The process of taking receivership of a bank can take several months. If it looks like the bank will not be able to raise capitol or correct problems, banking regulators take over.
"It's the only option to protect depositors," Billings said.
First Banking Center was deemed "significantly undercapitalized" and told it needed to raise capitol through the sale of shares or contributions by mid-October or face corrective action, according to a Sept. 1 story in The Monroe Times. The FDIC showed the bank lost almost $22 million between March 2009 and March 2010.
"They were given time to raise capitol," Billings said. "That didn't occur."
Billings also said there are no plans for layoffs at local branches. With the exception of the top two or three managment positions, he expected most personnel will be retained as keeping staff is a benefit for First Michigan.
Regulators on Friday also shut down three banks in Florida and Pennsylvania, lifting the number of U.S. banks that have failed this year to 149 as soured loans pile up and the economy limps forward.
Also seized were Gulf State Community Bank in Carrabelle, Fla., with $112.1 million in assets, and Allegiance Bank of North America in Bala Cynwyd, Pa., with $106.6 million in assets.
Centennial Bank, based in Conway, Ark., agreed to assume the assets and deposits of Gulf State Community Bank. Vist Bank, based in Wyomissing, Pa., is acquiring the assets and deposits of Allegiance Bank.
In addition, the FDIC and Centennial Bank agreed to share losses on $84.4 million of Gulf State Community Bank's loans and other assets. Centennial said the acquisition was the latest in a series in Florida under its strategy.
Centennial and the failed bank have competed directly in the Tallahassee and Franklin County markets in Florida, according to regulators. Separately Friday, the Federal Reserve Board approved the transaction, finding that the harmful effects of Centennial's takeover on competition in the two markets are outweighed "in the public interest" by its benefit to the communities in those areas.
The failure of Gulf State Community Bank is expected to cost the deposit insurance fund $42.7 million.
Florida has been the hardest hit state for bank failures. Gulf State Community Bank was the 28th bank to fail in the state this year. Other states that have seen large numbers of bank failures are California, Georgia and Illinois, amid an avalanche of bad loans, especially for commercial real estate.
The FDIC and Vist Bank agreed to share losses on $86.2 million of Allegiance Bank's assets. The failure of Allegiance Bank is expected to cost the deposit insurance fund $14.2 million.
The 149 closures nationwide so far this year tops the 140 shuttered in all of 2009 and is the most in a year since the savings-and-loan crisis two decades ago. By this time last year, regulators had closed 123 banks.
The 2009 failures cost the insurance fund about $36 billion; the failures so far this year have cost around $21 billion, less because the banks failing in 2010 have on average been smaller. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three succumbed in 2007.
The growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, and its deficit stood at $15.2 billion as of June 30.
The number of banks on the FDIC's confidential "problem" list jumped to 829 in the second quarter from 775 three months earlier, even as the industry as a whole had its best quarter since 2007, making $21.6 billion in net income. Banks with more than $10 billion in assets - only 1.3 percent of the industry - accounted for $19.9 billion of the total earnings.
The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.
Depositors' money - insured up to $250,000 per account - is not at risk, with the FDIC backed by the government.
Gerald Billings, senior ombudsman specialist for the Federal Deposit Insurance Corp., said all 17 First Banking Center locations in Wisconsin were closed by state banking regulators at 6 p.m. Friday. The bank locations were turned over to the FDIC, which in turn immediately sold all bank locations to First Michigan Bank, based in Troy, Mich.
Billings said bank locations will re-open immediately; those locations with Saturday hours will be open for business today, Nov. 20.
Furthermore, First Banking customers will see no disruption in service, Billings said. First Banking Center checks and ATM cards will continue to be honored, and direct deposits will be unaffected.
First Banking Center is based in Burlington and has $750.7 million in assets.
First Michigan Bank agreed to assume the assets and deposits of First Banking Center. In addition, the FDIC and First Michigan Bank agreed to share losses on $515.6 million of First Banking Center's loans and other assets.
The failure of First Banking Center is expected to cost the deposit insurance fund $142.6 million.
Billings said selling the bank to First Michigan is the "best scenario" for the FDIC. First Michigan has purchased other troubled banks from the FDIC, but until Friday's sale, did not have a presence in Wisconsin.
He said the reason for the bank closure is typical of other bank sales - "an excess of nonperforming commercial loans," including real estate, construction and development loans.
Troubled banks are given time to raise capitol in order to cover deficits caused by default loans, Billings said. The process of taking receivership of a bank can take several months. If it looks like the bank will not be able to raise capitol or correct problems, banking regulators take over.
"It's the only option to protect depositors," Billings said.
First Banking Center was deemed "significantly undercapitalized" and told it needed to raise capitol through the sale of shares or contributions by mid-October or face corrective action, according to a Sept. 1 story in The Monroe Times. The FDIC showed the bank lost almost $22 million between March 2009 and March 2010.
"They were given time to raise capitol," Billings said. "That didn't occur."
Billings also said there are no plans for layoffs at local branches. With the exception of the top two or three managment positions, he expected most personnel will be retained as keeping staff is a benefit for First Michigan.
Regulators on Friday also shut down three banks in Florida and Pennsylvania, lifting the number of U.S. banks that have failed this year to 149 as soured loans pile up and the economy limps forward.
Also seized were Gulf State Community Bank in Carrabelle, Fla., with $112.1 million in assets, and Allegiance Bank of North America in Bala Cynwyd, Pa., with $106.6 million in assets.
Centennial Bank, based in Conway, Ark., agreed to assume the assets and deposits of Gulf State Community Bank. Vist Bank, based in Wyomissing, Pa., is acquiring the assets and deposits of Allegiance Bank.
In addition, the FDIC and Centennial Bank agreed to share losses on $84.4 million of Gulf State Community Bank's loans and other assets. Centennial said the acquisition was the latest in a series in Florida under its strategy.
Centennial and the failed bank have competed directly in the Tallahassee and Franklin County markets in Florida, according to regulators. Separately Friday, the Federal Reserve Board approved the transaction, finding that the harmful effects of Centennial's takeover on competition in the two markets are outweighed "in the public interest" by its benefit to the communities in those areas.
The failure of Gulf State Community Bank is expected to cost the deposit insurance fund $42.7 million.
Florida has been the hardest hit state for bank failures. Gulf State Community Bank was the 28th bank to fail in the state this year. Other states that have seen large numbers of bank failures are California, Georgia and Illinois, amid an avalanche of bad loans, especially for commercial real estate.
The FDIC and Vist Bank agreed to share losses on $86.2 million of Allegiance Bank's assets. The failure of Allegiance Bank is expected to cost the deposit insurance fund $14.2 million.
The 149 closures nationwide so far this year tops the 140 shuttered in all of 2009 and is the most in a year since the savings-and-loan crisis two decades ago. By this time last year, regulators had closed 123 banks.
The 2009 failures cost the insurance fund about $36 billion; the failures so far this year have cost around $21 billion, less because the banks failing in 2010 have on average been smaller. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three succumbed in 2007.
The growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, and its deficit stood at $15.2 billion as of June 30.
The number of banks on the FDIC's confidential "problem" list jumped to 829 in the second quarter from 775 three months earlier, even as the industry as a whole had its best quarter since 2007, making $21.6 billion in net income. Banks with more than $10 billion in assets - only 1.3 percent of the industry - accounted for $19.9 billion of the total earnings.
The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.
Depositors' money - insured up to $250,000 per account - is not at risk, with the FDIC backed by the government.