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The Mortgage Graveyard
Failed, closed and a c q u i r e d mortgage-related entities.

2010's Bank Casualties Reach 68

Bank closings on Friday

May 10, 2010

By staff

Four banks in four states failed last week. Resulting losses are expected to exceed $200 million. Since the beginning of this year, 68 federally insured banks have failed.

On Friday, the Florida Office of Financial Regulation seized The Bank of Bonifay and appointed the Federal Deposit Insurance Corporation receiver. First Federal Bank of Florida stepped in to assume all of the Bonifay, Fla.-based bank's $230 million in deposits at par. But First Federal only acquired $78 million of the 66-employee bank's $243 million in assets -- which included $61 million in home loans, $24 million in commercial mortgages and $52 million in construction-and-land-development loans.

The FDIC -- which hit Bank of Bonifay with a cease-and-desist order in March 2009 -- expects to fork out $79 from its Deposit Insurance Fund as a result of the 104-year-old bank's failure.

Moving to the Midwest, Access Bank was seized by the Minnesota Department of Commerce, handed over to the FDIC and sold to PrinsBank. Champlin, Minn.-based Access had just nine employees, $32 million in assets and $32 million in deposits -- which PrinsBank assumed for an 0.02 percent premium. The 64-year-old company faced a cease-and-desist order in October 2009 from the FDIC, which projected associated losses at $6 million.

Next, the Arizona Department of Financial Institutions closed Towne Bank of Arizona because its "financial condition was unsafe and unsound." The Mesa, Ariz., institution was founded in 2004 and employed just over two dozen people. Commerce Bank of Arizona assumed all of the failed bank's $113 million in deposits for an 0.3 percent premium and acquired all of its $120 million in assets -- including $1 million in one- to four-family residential loans, $43 million in commercial mortgages and $20 million in construction-and-development loans..

An FDIC cease-and-desist order was issued against Towne in February. After sharing in losses on $80 million of Towne Bank's assets, resulting FDIC losses are expected to reach $42 million.

The final failure on Friday was 1st Pacific Bank of California in San Diego, which was shut down by the California Department of Financial Institutions as a result of "inadequate capital and other material weaknesses." As receiver, the FDIC sold all of 1st Pacific's $339 million in assets to City National Bank, which also assumed all of the failed institution's $291 million in deposits for a 1.62 percent premium.

1st Pacific was founded in November 2000 and entered a formal agreement with the Federal Reserve Bank of San Francisco in December. At the end of last year, it employed 79 people. Assets included $42 million in residential loans, $127 in commercial mortgages and $94 million in C&D loans. Factoring in a $276 million loss-share agreement, the FDIC expects related losses to reach $88 million.

1st Pacific was the 68th FDIC-insured institution to fail so far in 2010 and the 86th mortgage-related failure tracked this year by

After failing late last month and being taken over by the National Credit Union Administration, St. Paul's Croatian Federal Credit Union in Eastlake, Ohio, was liquidated on April 30, the NCUA announced.

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