The failure of a Florida bank Friday brought to 40 the number of federally insured banking institutions to fail this year. In all, three financial institutions were seized last week.
Coastal Bank was taken over Friday by the Office of Thrift Supervision and handed to the Federal Deposit Insurance Corp. as receiver. The 12-year-old institution had just 28 employees.
“Coastal Bank, which reported net losses in 2008, 2009 and 2010, was critically undercapitalized,” the OTS stated.
The Cocoa Beach, Fla.-based bank had $124 million in deposits and $129 million in assets –all which were taken over by Premier American Bank, N.A. Real estate holdings amounted to $34 million, while $45 million in commercial mortgages were owned and $16 million in construction-and-land-development assets were also on the books. A loss-share agreement was reached with the FDIC on $108 million of the assets.
A $13 million hit is expected to the Deposit Insurance Fund because of Coastal’s demise — the 40th FDIC-insured bank failure this year.
Also last week, two credit unions were thrown into conservatorship by the National Credit Union Administration. The regulator installs expert management at conserved credit unions to correct the deficiencies as regular service continues.
One of the collapsed institutions was Valued Members Federal Credit Union. The Jackson, Miss., credit union serves 2,030 members in the Jackson area. It was founded in 1957 and has just $9 million in assets.
The second credit union placed into conservatorship was Hmong American Federal Credit Union in St. Paul, Minn. The 716-member firm had less than $3 million in assets.
Mortgage Daily has tracked to demise of 12 credit unions so far during 2011. In all, 59 mortgage-related entities have been closed down or failed so far this year.
