WASHINGTON, March 19 (Reuters) - Regulators seized seven more U.S. banks on Friday, as high unemployment and troubled loan portfolios continue to weigh on the sector.
The seven failures, which are estimated to cost the government’s deposit insurance fund more than $1 billion, bring the 2010 tally to 37 failed institutions. Last year, 140 banks failed. At this week’s frantic pace, 365 banks would be shut down by the end of the year.
The Federal Deposit Insurance Corp said Advanta Bank Corp of Draper, Utah; Appalachian Community Bank of Ellijay, Georgia; Bank of Hiawassee, Hiawasee, Georgia; First Lowndes Bank of Fort Deposit, Alabama; Century Security Bank of Duluth, Georgia; American National Bank of Parma, Ohio; and State Bank of Aurora in Aurora, Minnesota were closed.
Advanta, at $1.6 billion in total assets and $1.5 billion in total deposits, was the largest of the seven, though the FDIC was unable to find a buyer.
The regulator said checks for insured funds would be mailed to account holders on Monday. The FDIC said the banks had about $247,000 in uninsured deposits, though it cautioned that figure was likely to change.
Appalachian had about $1.01 billion in total assets. Community & Southern Bank of Carrollton, Georgia agreed to assume all of Appalachian’s $917.6 million in deposits.
Bank of Hiawassee had about $377.8 million in total assets. Citizens South Bank of Gastonia, North Carolina agreed to assume all of $339.6 million in deposits.
First Lowndes had abut $137.2 million in assets. First Citizens Bank of Luverne, Alabama agreed to assume all $131.1 million in deposits.
Century Security had $96.5 million in total assets. Bank of Upson of Thomaston, Georgia agreed to assume all $94.0 million in deposits.
American National had $70.3 million in total assets. The National Bank and Trust Company of Wilmington, Ohio agreed to assume $66.8 million in total assets.
State Bank of Aurora had about $28.2 million in total assets. Northern State Bank of Ashland, Wisconsin agreed to assume all $27.8 million in deposits.
The seven banks together would cost the FDIC’s Deposit Insurance Fund about $1.28 billion.
FDIC Chairman Sheila Bair this week said banks are making progress in working through their troubled assets.
“We think this is going to peak this year, and it’s going to get considerably better next year,” Bair told an American Bankers Association conference on Thursday.
In the fourth quarter, the banking industry reported a profit of $914 million, compared with a $37.8 billion net loss a year earlier.
However, the recovery has been lopsided, with the largest banks enjoying a quicker return to profits.
Smaller institutions are particularly struggling with large concentrations in commercial real estate, a sector that has been slower to unravel.
Bankers told Bair at the ABA conference this week that small banks are at a competitive disadvantage. They said larger banks are still considered “too big to fail” and therefore enjoy lower funding costs and an influx of deposits.
The FDIC estimates that the total cleanup cost for the bank industry will be $100 billion from 2009 through 2013.
Bair said this week that she does not expect the FDIC will have to tap its line of credit with the Treasury Department or charge a surprise fee on the industry to pay for bank failures.
Addditional reporting by Karey Wutkowski; Editing by Bernard Orr