Among two banks to fail last week was a nearly $1 billion institution in Virginia. Meanwhile, two events have been scheduled as part of an effort to find buyers for two failed corporate credit unions.
Virginia’s State Corporation Commission closed Bank of the Commonwealth pursuant to Virginia banking law Section 6.2-913, which authorizes the state to seize a bank if it is found to be insolvent or if deemed necessary for the protection of the public interest.
The Norfolk, Va.-based bank had $902 million in deposits as of June 30 and $985 million in assets including $220 million in home loans, $473 million in commercial real estate loans and $86 million in construction-and-land-development loans. It was founded in 1971 and employed 201 people when it failed.
The Federal Deposit Insurance Corp., which was named receiver of Bank of Commonwealth, awarded the winning bid to Southern Bank and Trust Co. But the regulator was forced to share in losses on $798 million of the acquired assets — bringing estimated losses to $268 million.
Inadequate capital forced the California Department of Financial Institutions to close Citizens Bank of Northern California. Again, the FDIC was named receiver.
Citizens was founded in 1995. The 73-employee company had $253 million in deposits and $289 million in assets including $56 million in residential mortgages, $126 million in commercial mortgages and $21 million in construction-and-development assets. Related losses to the Deposit Insurance Fund are estimated at $37 million.
Citizens executive Melvin Rohs faced an FDIC prohibition order in April and was hit with an FDICÂ cease-and-desist order in February 2010.
Including Nevada City, Calif.-based Citizens, 73 FDIC-insured banks have failed so far this year.
The FDIC, itself, said this month that it would close a midwest satellite office in Schaumburg, Ill., on Sept. 28. The office was originally approved in January 2010 as a temporary facility to manage receiverships and to liquidate assets from failed financial institutions primarily located in the Midwest. But a lighter workload and an improving banking sector mean that the workload from the temporary office can now be handled by staff in permanent FDIC offices.
Control of Chetco Federal Credit Union was seized Friday by the National Credit Union Administration, which became conservator of the Harbor, Ore., institution as it works to resolve issues hurting the credit union.
Chetco has $333 million in assets. It serves two Oregon Counties and one California county and has 32,435 members. It was the 18th credit union failure tracked so far this year by Mortgage Daily.
Including non-banks, banks and credit unions — 104 mortgage-related closings and failures have been recorded during 2010.
An Oct. 3 meeting is being hosted by the NCUA for parties interested in acquiring U.S. Central Bridge Corporate Federal Credit Union operations. The meeting will be held in Kansas City, Mo.
“This meeting is an important first step in the process for potential acquirers to learn about U.S. Central Bridge’s operations and the process for submitting a proposal to acquire operations,” Scott Hunt, agent for the conservator of U.S. Central Bridge, said in a statement. “NCUA seeks a solution that minimizes disruption to U.S. Central Bridge members and their downstream credit union members, while minimizing costs to the Corporate Stabilization Fund.”
The NCUA is also holding a conference call on Oct. 5 for corporate credit unions interested in acquiring the operations of Western Bridge Corporate Federal Credit Union.
