| More than $300 million in losses are projected from the failure of six banks Friday. Three of the failed banks survived the Great Depression.
The New Jersey Department of Banking and Insurance Friday closed ISN Bank. Tom Considine, commissioner of the department, called ISN’s failure an isolated incident and noted that the nine-year-old company was not a traditional community bank. Like with all of last week’s bank failures, the Federal Deposit Insurance Corp. was named receiver. New Century Bank agreed to assume ISN’s $80 million in deposits at par and acquire its $82 million in assets including $13 million in home loans, $29 million in commercial mortgages and $2 million in construction and land development assets. The FDIC, which issued a cease-and-desist order against the Cherry Hill, N.J.-based institution in 2008, agreed to a $65 million loss-share arrangement and projected a $24 million hit to its Deposit Insurance Fund as a result of the 10-employee firm’s failure.After that, the Georgia Department of Banking and Finance seized The Bank of Ellijay, First Commerce Community Bank and The Peoples Bank. All three banks were acquired by Community & Southern Bank. More than $200 million in losses are estimated from the demise of the Georgia trio. Bank of Ellijay was hit with an FDIC cease-and-desist order in November 2009, while First Commerce faced an FDIC cease-and-desist in January 2009. In the Cincinnati suburb of Milford, Ohio, Bramble Savings Bank was take over by  the Ohio Division of Financial Institutions. Bramble’s $42 million in deposits were assumed at par by Cincinnati-based Foundation Bank. The 10-employee institution, founded in 1916, is expected to cost the FDIC $15 million.Three years ago, the FDIC issued a cease-and-desist order against Bramble. The final bank failure Friday was Maritime Savings Bank. In its announcement about the event, the Office of Thrift Supervision called the company “significantly undercapitalized” with no reasonable prospect of recovery.Operating from West Allis, Wis., the thrift employed 66 people. Maritime, founded in 1912 as Kinnickinnic Mutual Loan & Building Association, had $248 million in deposits, all of which were assumed by North Shore Bank, FSB, at par. North Shore, however, only picked up $178 million of` Maritime’s $351 million in assets — though the FDIC avoided any loss-sharing agreement.A prompt corrective action was issued by the OTS in March against Maritime, while the thrift regulator hit the bank with a cease-and-desist order in November 2009. The FDIC projects Maritime’s failure will cost $84 million. Maritime was the 125th federally insured bank to fail this year. In all, 154 mortgage-related failures have been tracked so far this year by the Mortgage Graveyard. Over in Manati, Puerto Rico, the National Credit Union Administration liquidated Industries Puerto Rico Federal Credit Union. The failed institution had 1,956 members with $3.7 million in deposits. Borinquen Community Federal Credit Union purchased and assumed credit union’s assets, loans and shares. |
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Sept. 17, 2010 Bank Failures
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