WASHINGTON (Reuters) - The tally of U.S. bank failures reached 124 so far this year as regulators seized a small Florida bank on Friday.
The Federal Deposit Insurance Corp said Commerce Bank of Southwest Florida, based in Fort Myers, Florida, was closed and that Central Bank of Stillwater, Minnesota, will assume all of the deposits.
The FDIC did not give a reason for the failure, but small banks are collapsing almost every week, taken under by portfolios of deteriorating loans originated during the credit boom.
The FDIC has said bank failures will remain elevated through next year, as the recovery of the banking industry lags the healing of the overall economy.
Commerce Bank had assets of $79.7 million and total deposits of about $76.7 million, the FDIC said. The FDIC and Central Bank entered into a loss-share transaction on about $61 million of Commerce Bank’s assets
The sole branch of Commerce Bank will open on Monday as a branch of Central Bank.
The failure is expected to cost the FDIC’s insurance fund $23.6 million.
The fund’s balance went negative as of the end of the third quarter, but the FDIC has plenty of access to funding, including a $500 billion line of credit with the U.S. Treasury Department.
The agency earlier this month approved a plan to have banks prepay three years of industry fees to give the FDIC cash to handle the cost of bank failures.
The FDIC has estimated the total cost of failures will be $100 billion from 2009 through 2013.
The agency will hold a briefing next week to reveal bank industry earnings for the third quarter. It also will provide an update about the state of the insurance fund and how many banks are on the FDIC “troubled bank list.”
The FDIC said 416 banks were on that list as of the end of the second quarter. Most banks on the list do not fail, the agency has said.
Reporting by Karey Wutkowski; editing by Carol Bishopric