Two More Banks Fail, Total 25 for 2009

A bank each in Missouri and Nevada failed on Friday, bringing the number of bank failures this year to 25.

The Office of Thrift Supervision closed the American Sterling Bank of Sugar Creek, Mo., appointing the Federal Deposit Insurance Corporation as receiver. The FDIC entered into a purchase and assumption agreement with Metcalf Bank of Lee's Summit, Mo., to assume all of American Sterling's deposits.

The Missouri offices of American Sterling reopened on Saturday, and the offices in California and Arizona reopened Monday as branches of Metcalf Bank.

American Sterling had assets of $181 million and deposits of $171.9 million. In addition to assuming the failed bank's deposits, Metcalf also agreed to purchase $173.6 million in assets. The FDIC and Metcalf Bank entered into a loss-share transaction on some $100 million of American Sterling's assets.

The FDIC estimates the cost to the Deposit Insurance Fund will be $42 million. American Sterling Bank is the 24th FDIC-insured institution to fail in 2009. The last FDIC-insured institution to be closed in Missouri was Hume Bank in Hume on March 7, 2008.

The Nevada Financial Institution Division closed the Great Basin Bank of Nevada of Elko, Nev., and tapped the FDIC as receiver. The FDIC entered into a purchase and assumption agreement with Nevada State Bank of Las Vegas to assume all of Great Basin Bank's deposits.

The five offices of Great Basin reopened Monday as branches of Nevada State Bank. The Great Basin had assets of $270.9 million and deposits of $221.4 million. In addition to assuming all of the deposits of the failed bank, Nevada State Bank agreed to purchase $252.3 million of assets.

The FDIC and Nevada State Bank entered into a loss-share transaction on $143.4 million of Great Basin Bank's assets. Nevada State Bank will share in the losses on the asset pools covered under the loss-share agreement.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $42 million. Great Basin Bank was the 25th FDIC-insured institution to fail in the nation this year, and the second in Nevada. The last FDIC-insured institution to be closed in Nevada was Security Savings Bank, Henderson, on Feb. 27.


About the Author

Linda McGlasson

Linda McGlasson

Managing Editor

Linda McGlasson is a seasoned writer and editor with 20 years of experience in writing for corporations, business publications and newspapers. She has worked in the Financial Services industry for more than 12 years. Most recently Linda headed information security awareness and training and the Computer Incident Response Team for Securities Industry Automation Corporation (SIAC), a subsidiary of the NYSE Group (NYX). As part of her role she developed infosec policy, developed new awareness testing and led the company's incident response team. In the last two years she's been involved with the Financial Services Information Sharing Analysis Center (FS-ISAC), editing its quarterly member newsletter and identifying speakers for member meetings.




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