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Miami Valley becomes year's 3rd failed bank - FDIC
October 4, 2007 / 11:03 PM / in 10 years

Miami Valley becomes year's 3rd failed bank - FDIC

WASHINGTON, Oct 4 (Reuters) - Miami Valley Bank, with $86.7 million in assets, became the third failed insured bank this year when Ohio’s industry regulators closed it down on Thursday, the Federal Deposit Insurance Corporation said.

The Citizens Banking Corp took over $62 million of insured deposits and two offices, which will reopen on Friday, the FDIC said in a statement.

The FDIC, which took receivership of the failed bank, said its remaining $14 million in 269 deposits exceeded the federal deposit insurance limit and depositors of that amount will become creditors.

The FDIC will retain the assets of the failed Lakeview, Ohio-based bank.

The Ohio Department of Commerce said in a statement that state officials found that the bank “is in an unsafe and unsound condition to continue the business of banking,” and “is insolvent, in that it has liabilities in excess of its assets.”

Dennis Ginty, a spokesman for the Ohio Department, said he could not say what factors caused the bank to fail, citing a confidentiality clause in a law regarding examinations of state chartered banks.

The agency said the cost to the deposit insurance fund would amount to about $3 million.

Miami Valley represents the third bank failure this year and the first in Ohio since Oakwood Deposit Bank was closed in February 2002.

Last week regulators shut down NetBank Inc NTBK.PK, an Internet bank with $2.5 billion in assets and $2.3 billion in deposits, after suffering significant losses due to payment defaults, weak underwriting of loans and failed business strategies.

ING Bank, a unit of Dutch bank group ING Groep NV ING.AS, took control of NetBank’s deposits and buy $724 million of liquid assets.

EverBank acquired about $700 million of NetBank’s mortgage assets.

The FDIC has a $100,000 insurance limit on typical accounts, with a $250,000 limit on IRA retirement accounts. Its insurance fund exceeds $50 billion and can be tapped to help deposit customers.

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