Regulators on Friday shut down a small Florida bank, bringing the number of U.S. bank failures this year to 40.
The pace of closures has slowed, however, as the economy improves and banks work their way through piles of bad debt. By this time last year, regulators had closed 68 banks.
The Federal Deposit Insurance Corp. seized Coastal Bank of Cocoa Beach, with about $129.4 million in assets and $123.9 million in deposits as of March 31.
Premier American Bank N.A., based in Miami, agreed to assume the deposits and buy the assets of the failed bank. It also agreed to share losses on $108.2 million of Coastal Bank’s assets with thc FDIC.
Coastal Bank’s two branches will reopen on Monday as branches of Florida Community Bank. a division of Premier American, the FDIC said.
Florida has been among the hardest-hit states for bank failures, according to Associated Press.
Regulators shuttered 29 banks in the state last year. Coastal Bank is the fifth Florida lender shut down by the FDIC this year.
In 2010, authorities seized 157 banks that succumbed to mounting soured loans and the hobbled economy. It was the most in a year since the savings-and-loan crisis two decades ago.
There were 140 bank failures in 2009, costing the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were smaller on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.
From 2008, the year the financial crisis struck, through 2010, bank failures cost the fund $76.8 billion. The deposit insurance fund fell into the red in 2009, and its deficit stood at $7.4 billion as of December 31.
The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.
Depositors’ money –insured up to $250,000 per account is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted last July.
The number of banks on the FEDIC’s confidential “problem” list rose to 884 in the final quarter of last year, from three months earlier. The 884 troubled banks is the highest number since 1993, during the saving-and-loan crisis.