Regulators shut down 4 banks; marks 90 bank closures this year

Number of bank failures hits 90 for the year

NEW YORK — Regulators on Friday shut down banks in Maryland, Oklahoma and New York, lifting to 90 the number of U.S. bank failures this year.

The Federal Deposit Insurance Corp. said it was appointed receiver of Bay National Bank and Ideal Federal Savings Bank, both based in Baltimore. Bay National Bank had $282.2 million in assets and $276.1 million in deposits as of March 31. Ideal Federal Savings Bank had $6.3 million in assets and $5.8 million in deposits.

The FDIC also took over Home National Bank in Blackwell, Okla., with $644.5 million in assets and $560.7 million in deposits, and USA Bank in Port Chester, N.Y., with $193.3 million in assets and $189.9 million in deposits.

Bay National Bank’s deposits will be assumed by Bay Bank, FSB, based in Lutherville, Md., the FDIC said. Its branches will reopen Monday.

The FDIC approved the payout of the insured deposits of Ideal Federal Savings Bank after failing to find another institution to take over its operations.

RCB Bank in Claremore, Okla., will assume Home National Bank’s deposits, the FDIC said, while Enterprise Bank & Trust agreed to buy $260.8 million of the bank’s assets. New Century Bank in Phoenixville, Pa., agreed to assume USA Bank’s deposits and most of its assets.

The closures bring to three the number of bank failures this year in Maryland. Bay National Bank’s failure is expected to cost the deposit insurance fund $17.4 million, while Ideal Federal Savings Bank’s closure is expected to cost the fund $2.1 million.

Home National Bank’s failure will cost the fund an estimated $78.7 million. The cost of USA Bank’s closure to the fund is expected to be $61.7 million.

With 90 closures nationwide so far this year, the pace of bank failures far outstrips that of 2009, which was already a brisk year for shutdowns. By this time last year, regulators had closed 45 banks. The pace has accelerated as banks’ losses mount on loans made for commercial property and development.

The number of bank failures is expected to peak this year and be slightly higher than the 140 that fell in 2009. That was the highest annual tally since 1992, at the height of the savings and loan crisis. The 2009 failures cost the insurance fund more than $30 billion. Twenty-five banks failed in 2008, the year the financial crisis struck with force, and only three succumbed in 2007.

As losses have mounted on loans made for commercial property and development, the growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, and its deficit stood at $20.7 billion as of March 31.

The number of banks on the FDIC’s confidential “problem” list jumped to 775 in the first quarter from 702 three months earlier, even as the industry as a whole had its best quarter in two years.

A majority of institutions posted profit gains in the January-March quarter. But many small and midsized banks are likely to continue to suffer distress in the coming months and years, especially from soured loans for office buildings and development projects.

The FDIC expects the cost of resolving failed banks to total around $60 billion from 2010 through 2014.

The agency mandated last year that banks prepay about $45 billion in premiums, for 2010 through 2012, to replenish the insurance fund.

Depositors’ money — insured up to $250,000 per account — is not at risk, with the FDIC backed by the government.