Regulators shut down community banks in Florida, Illinois, Nebraska, and Oregon, on Friday, bringing the total number of failed institutions to 13 during the first 45 days of 2009. The four most recent seizures represent the most on a single day so far this year, and according to multiple media reports, regulators are bracing for dozens more banks to collapse in the coming months as the national recession deepens.

Riverside Bank of the Gulf Coast in Cape Coral, Florida, was closed Friday by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC entered into a purchase and assumption agreement with TIB Bank of Naples, Florida, to assume all of the deposits of Riverside Bank for a premium of 1.3 percent.

Riverside Bank had total deposits of $424 million and total assets of approximately $539 million. TIB agreed to also purchase $125 million of Riverside's assets, comprised mainly of cash, cash equivalents, and marketable securities. Riverside's nine offices will reopen on Tuesday as branches of TIB Bank. The FDIC estimates the cost to its Deposit Insurance Fund for the failed Florida institution will be $201.5 million.

Corn Belt Bank and Trust Company in Pittsfield, Illinois, was shut down by the Division of Banking, Illinois Department of Financial Regulation. To protect depositors, the FDIC entered into an agreement with Carlinville National Bank, Carlinville, Illinois, to assume all of the deposits of Corn Belt Bank and Trust. Corn Belt Bank and Trust's two offices will reopen on Tuesday as branches of Carlinville National Bank.

Corn Belt Bank and Trust had total deposits of $234.4 million and total assets of approximately $271.8 million. In addition to assuming all of the deposits of Corn Belt Bank and Trust for a premium of 1.75 percent, Carlinville National Bank agreed to purchase approximately $60.7 million in assets. The FDIC estimates that the failure of Corn Belt Bank, the second institution in Illinois to be closed this year, will cost the national insurance fund $100 million.

Sherman County Bank in Loup City, Nebraska, was shuttered by the Nebraska Department of Banking and Finance. Heritage Bank of Wood River, Nebraska, agreed to assume all of the failed bank's deposits from the FDIC. Sherman County Bank's four offices, including those that operated under the name Howard County Bank, will reopen on Tuesday as branches of Heritage Bank.

Sherman County Bank had total deposits of $85.1 million and total assets of approximately $129.8 million. Heritage Bank will pay the FDIC a premium of six percent. In addition to assuming all of the deposits of Sherman County Bank, Heritage Bank agreed to purchase approximately $21.8 million in assets. The failure is expected to cost $28.0 million, the FDIC said. The last institution to fail in Nebraska was Equitable Savings and Loan, Columbus, in early 1990.

Pinnacle Bank in Beaverton, Oregon, was closed by the Oregon Division of Finance and Corporate Securities, and the FDIC was appointed receiver. The FDIC entered into a purchase and assumption agreement with Washington Trust Bank of Spokane, Washington, to assume all Pinnacle Bank's $64 million in deposits. Pinnacle Bank's sole office will reopen on Tuesday as a branch of Washington Trust Bank.

Pinnacle Bank also had total assets of approximately $73 million, of which Washington Trust agreed to purchase $72 million at a discount of $7.6 million. The FDIC and Washington Trust entered into a loss-share transaction, in which the two will share in the losses on approximately $66 million in assets covered under the agreement. According to the FDIC, the loss-sharing arrangement will maximize returns on the assets by keeping them in the private sector and minimize disruptions for loan customers. The FDIC estimates that the cost to its Deposit Insurance Fund for the failed Oregon bank will be $12.1 million. The last bank to be closed in Oregon was in 1991.

Paul Dauterive | 02.16.09 www.dsnews.com