Banks in Florida and Nebraska were shut by state regulators, boosting the toll of failed institutions to 11, as a deepening economic recession and slumping housing market pushes home foreclosures to records, Bloomberg reported.
Riverside Bank of the Gulf Coast in Cape Coral, Florida, was seized by the Florida Office of Financial Regulation, and Sherman County Bank in Loup City, Nebraska, was closed by the Nebraska Department of Banking and Finance. The Federal Deposit Insurance Corp. was named receiver for both banks.
TIB Bank of Naples, Florida, will take over Riverside's $424 million in deposits, except $142.6 million in brokered deposits, paying a 1.3 percent premium. Heritage Bank of Wood River, Nebraska, will pay a 6 percent premium for Sherman County's $85.1 million in deposits. The cost to the deposit insurance fund to close Riverside Bank is about $201.5 million, the FDIC said. The failed banks' offices will open Feb. 17 as branches of their acquiring institutions, the FDIC said.
Regulators seized nine banks through five weeks of this year and six in January, the highest monthly toll since 1993. State and federal agencies shuttered 25 banks last year, matching the combined total for 2001-2007, as home foreclosures soared and bank profits tumbled.
The Obama administration is seeking to jolt the economy with a bank rescue using $350 billion from the Troubled Asset Relief Program, a $787 billion stimulus package and a plan to stem foreclosures that will be outlined next week. The U.S. will subsidize interest-rate reductions to help borrowers avoid
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