Record Bank Foreclosure List Growth Struck Nine Banks

by Peter Vernon on Foreclosure Listings

Record bank foreclosure list growth delivered a sharp blow to banks, closing banks long struggling from the weight of residential and commercial foreclosures. Just these first three few weeks of the year 2010, nine banks already succumbed to financial pressures and closed. They followed the fate of 140 banks that failed last year.

Horizon Bank, based in Bellingham, Washington, took the sad record of being the first bank to fail in 2010. On January 8, the bank was closed and acquired by Washington Federal Savings and Loan Association. It had $1.3 billion in assets and $1.1 billion in deposits in the third quarter of last year.

On January 15, three banks were closed: the Saint Stephen State Bank in Minnesota, the Town Community Bank and Trust in Illinois and the Barnes Banking Company in Utah.

The deposits of Saint Stephen, which had $24.7 million in assets and $23.4 million in deposits as of September 30 last year, were assumed by Minnesota-based First State Bank.

The deposits of Town Community, which had $69.6 million in assets and $67.4 million in deposits, were acquired by Illinois-based First American Bank.

In the case of Barnes Banking, the Federal Deposit Insurance Corporation created an entity called Deposit Insurance National Bank to service depositors until February 12, 2010 and enable them to open new accounts in other banks. Barnes Banking had $827.8 million in assets and $786.5 million in deposits.

Bank foreclosure list growth also clobbered the five banks that closed on January 25 – the Columbia River Bank in Oregon, Evergreen Bank in Washington State, Charter Bank in New Mexico, Bank of Leeton in Missouri, and Premier American Bank in Florida.

Like the 140 banks that succumbed to the weight of commercial and residential foreclosures and short sales foreclosures, these nine banks also suffered from large percentages of nonperforming mortgage loans.

Columbia River, with about $1.1 billion in assets and $1 billion in deposits, was taken over by Tacoma, Washington-based Columbia State Bank. The deposits of Evergreen, with $488.5 million in assets and $439.4 million in deposits, were assumed by Umpqua Bank.

Meanwhile, the deposits of Santa Fe-based Charter Bank were taken over by Albuquerque-based Charter Bank. Bank of Leeton was taken over by Sunflower Bank of Kansas while Premier American Bank was taken over by a newly chartered national institution also called Premier American Bank.

Miami-based Premier American Bank was the first bank to fail in 2010 in Florida, among the states hardest hit by bank foreclosure list growth.