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More Closings Bad News for U.S. Banks

More bad news for Banks within United States was announced this week. The Federal Deposit Insurance Corporation closed banks in Florida, Illionois, Maryland, and Utah. The total number of banks that have closed in the first quarter of 2010 adds up to 26. In 2009, the total number of banks closed due to recession and loan defaults numbered 140.

Sun American Bank with headquarters located in Boca Raton, Florida was seized by the FDIC with $535.7 million in assets and $443.5 million in deposits with First-Citizens Bank & Trust Co buying out the bank's assets and deposits. Heartland Bank and Trust Co bought out The Bank of Illionois in Normal, Ill was also seized with $211.7 million in assets and $198.5 million in deposits. No buyer purchased The Waterfield Bank in Germantown, Md., with $155.6 million in assets and $156.4 million in deposits. The FDIC will assume operation of the bank until April 5th. Lastly, Centennial Bank in Ogden, Utah, with $215.2 million in assets and $205.1 million in deposits was shut down. No buyer was found for this bank either though the FDIC approved the payout of the bank's insured deposits.

The total failure cost of the above banks is an estimated $304.8 million dollars. The FDIC predicts that bank seizures this year will increase rapidly and substantially in future months as the economy weakens, unemployment rises, home values fall, and loan defaults increase.

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