Tracking Bank Failures: Regulators Close ShoreBank and 7 Others

The Wall Street Journal
The largest of the banks was ShoreBank Corp., which agreed to sell assets to a team led by the community lender’s executives and backed by several large U.S. financial firms.
The Chicago bank, which had ties to the Obama administration and deep roots on Chicago’s South Side, had $2.16 billion in assets and $1.54 billion in deposits.
The new institution will be known as Urban Partnership Bank and led by William Farrow, a former First Chicago Corp. executive who was ShoreBank’s president and chief operating officer at the time of its failure.
The decision to sell to management is a rare move by the FDIC, which generally bars investors who own more than 10% of the failed bank from bidding on its assets.
The FDIC also typically wants to know if bidders have “ever been an officer or director of a failed institution” and “participated in a material way in one or more transactions that caused a substantial loss to any such failed institution,” according to an FDIC document.
Regulators also closed four small banks in California, two in Florida and one in Virginia. CenterState Bank of Florida picked up the assets and deposits of the two failed Florida banks, Bartow, Fla.-based Community National Bank at Bartow and Independent National Bank of Ocala, Fla. Community National Bank had assets of $67.9 million and deposits of $63.7 million; Independent National Bank had assets of $156.2 million and deposits of $141.9 million.
In Martinsville, Va., regulators seized minority-owned Imperial Savings & Loan Association, which had six employees, assets of $9.4 million, one office and no branches.
Martinsville-based River Community Bank agreed to assume all deposits and purchase its assets. In California, El Centro-based Rabobank purchased assets and assumed deposits of Butte Community Bank in Chico, Calif., and Pacific State Bank in Stockton, Calif. Pacific Western Bank in San Diego took over assets and assumed deposits from the failed Solvang, Calif.-based Los Padres Bank, while San Rafael, Calif.-based Westamerica Bank purchased assets and assumed deposits from the seized Sonoma Valley Bank in Sonoma, Calif.
Those eight failures, tied for most on any day so far in 2010, cost the FDIC insurance fund $473.5 million.