With the three banks closed on Friday the 13th, the total for the year has now reached 123. The banks taken over by the Federal Deposit Insurance Corporation included unsurprisingly, two in Florida and one in California.
The Florida banks were Orion Bank, Naples, Florida, and Century Bank, FSB, Sarasota, Florida. In California Pacific Coast National Bank, San Clemente, was the bank closed down.
Concerning how that will affect customers at Pacific Coast National Bank, San Clemente, California, a purchase and assumption agreement was undertaken between the FDIC and Sunwest Bank, Tustin, California, where the former deposits at Pacific Coast National Bank will be assumed by Sunwest Bank.
On Monday the two branches of Pacific Coast, which were temporarily closed, will be reopened as branches of Sunwest Bank.
For Century Bank, FSB, Sarasota, Florida, along with Orion Bank, Naples, Florida, they will be taken over by IberiaBank, based in Lafayette, Louisiana. They also made a purchase and assumption agreement with the FDIC whereby IberiaBank will assume the $2.4 billion in assets of Orion, and all of its deposits.
The 23 branches of Orion will reopen as branches of IberiaBank.
For Century Bank, IberiaBankwill assume their deposits as well, along with $706 million in assets. The rest of their assets will be held by the FDIC for sale at a future date.
Depositors of Century Bank won’t need to do anything, as their deposits were automatically transferred to IberiaBank, and Century Banks eleven branches will reopen as branches of IberiaBank. The FDIC will still be insuring the accounts so there’s no need for concern in that regard.
Century Bank will cost the deposit insurance fund approximately $344 million, while Orion Bank will cost an estimated $615 million.
In June the FDIC increased its estimate as to how many banks were on their “problem list” from 305 to 416. Past experience has shown that about 13 percent of those on the list usually fail, but that of course assumes the list is accurate.
I don’t see only 40 to 50 banks that will fail going forward, which would represent the 13 percent of 416 on the problem list.
