Five more banks fail -- 89 so far in 2009
Regulators close banks in Arizona, Illinois, Iowa and Missouri.
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Amy Haimerl, CNNMoney.com senior producer
Last Updated: September 5, 2009: 5:58 AM ET
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Bank failures and foreclosures keep mounting
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NEW
YORK (CNNMoney.com) -- Five small regional banks were closed by
regulators on Friday evening, pushing 2009's tally so far to 89
institutions. Of the five failures, two were in Illinois, and there was
one each in Arizona, Iowa and Missouri.
Customers of the banks,
however, are protected. The Federal Deposit Insurance Company, which
has insured bank deposits since the Great Depression, covers each
customer account up to $250,000.
In Illinois, Platinum
Community Bank, in Rolling Meadows, and InBank, in Oak Forest, were the
latest institutions to be cosed by regulators. This makes for a total
of 15 failed Illinois banks this year. The last one to go under was
Mutual Bank, in Harvey, on July 31, 2009.
The Office of Thrift
Supervision was unable to find a buyer to take over the assets of
Platinum Community, which were estimated at $345.6 million with
deposits of $305 million. As a result, the FDIC will begin mailing
customers checks for their insured deposits beginning on Tues., Sept.
8.
That means customers are out of luck over the weekend and
cannot access any of their Platinum Community accounts. "The bank is
gone. It no longer exists," said David Barr, spokesman for the FDIC.
"We couldn't find an appropriate buyer. We don't do that very often."
For
those Platinum Community customers expecting direct deposits from the
federal government -- such as Social Security and Veterans' payments --
MB Financial Bank will handle the transactions. But customers must use
the MB Financial branch at 2251 Plum Grove in Palatine, Ill., to access
those funds.
Unlike Platinum Community, MB Financial agreed to
purchase the assets and deposits of Illinois' other failed bank,
InBank. MB Financial receives InBank's $212 million in assets and $199
million in deposits, and customers' funds are automatically rolled over
to the new institution.
The three branches of InBank will open
as normal on Sat., Sept. 5, as new MB Financial outlets. Customers can
continue using their debit cards and writing checks as normal.
In
the West, the assets and deposits of First State Bank of Flagstaff,
Ariz., were sold off to Sunwest Bank, based in Tustin, Calif. All First
State customers -- totaling $95 million in deposits -- automatically
become new Sunwest clients.
This is the third bank failure in
Arizona this year. The last institution to go under was Union Bank in
Gilbert, on Aug. 14, 2009.
Check writing privileges and debit
card transactions will continue as normal through the weekend. On
Tuesday, all six branches of First State will reopen as outposts of
Sunwest Bank.
In the Midwest, Vantus Bank, in Sioux City,
became Iowa's first bank to fail in 2009. It had been nearly a decade
since the state faced a bank closure.
Great Southern Bank of
Springfield, Mo., is assuming Vantus' $368 million in deposits. It will
take a fwe weeks for Great Southern to finalize the transaction, but
until then customers can continue using the existing branches of Vantus
as well as write checks and use their debit cards. Great Southern is
also managing Vantus' $458 million in assets until it can sell them off
later.
Customers of First Bank of Kansas City, in Kansas City.,
Mo., can now call Great American Bank of De Soto, Kan., their financial
home. When the bank was closed on Friday, it became Missouri's second
failure of 2009. When the sole branch of First Bank reopens on
Saturday, it will be an outpost of Great American Bank. Customers can
continue writing checks and using their debit cards as normal.
Great American Bank bought the banks' $16 million in assets and approximately $15 million in deposits.
The FDIC estimates that these five bank failures will cost the Deposit Insurance Fund a total of $401.3 million.
Anyone
who needs further information about what deposits or insured or needs
additional details on their bank's failure can visit www.fdic.gov or
call 1-800-537-4048. 