The nation's tally of 2009 bank casualties hit 130 Friday when regulators shuttered a large Ohio bank, an Illinois bank, a Virginia bank and three small Georgia banks. The largest bank to fail was AmTrust Bank in Cleveland. A total of 130 lenders have collapsed in 2009, the highest number of failures since 1992 as regulators intensified their push to rid the industry of weak institutions.
Regulators also closed Benchmark Bank in Aurora, Ill., and Greater Atlantic Bank in Reston, Va. The Buckhead Community Bank in Atlanta, Ga., First Security National Bank in Norcross, Ga., The Tattnall Bank in Reidsville, Ga., were also closed. Customers of all the six failed banks are protected, however. The Federal Deposit Insurance Corp., which has insured bank deposits since the Great Depression, currently covers customer accounts up to $250,000. The family-owned AmTrust, with $12 billion in assets and roots back to 1889, had been in trouble for more than a year. Like many other banks during the housing bubble, AmTrust barreled into unfamiliar geographic areas with aggressive mortgage and construction lending. Net losses of about $1 billion since last year's second quarter consumed nearly 80% of its capital. New York Community Bancorp Inc., Westbury, N.Y., is acquiring AmTrust and its 66 branches. The purchase is a dramatic expansion for New York Community, which runs a handful of banks in New York and New Jersey. The company has made seven acquisitions since 2000, none of them outside the New York City metropolitan area, where it has about 212 branches. The Federal Deposit Insurance Corp. said the AmTrust failure was expected to cost its deposit-insurance fund about $2 billion. AmTrust's deterioration over the past year likely resulted in the bank selling for a lower price than it would have fetched if the thrift had been seized earlier, said people familiar with the government-led auction. As part of the deal, the FDIC is shielding New York Community from most losses on $9 billion of AmTrust's assets. AmTrust has been riding a regulatory rollercoaster for the past year. Last fall, its primary regulator, the Office of Thrift Supervision, rejected AmTrust's requests for aid through the federal government's Troubled Asset Relief Program. The OTS then slapped AmTrust with a cease-and-desist order, citing "unsafe and unsound banking practices," and required the thrift shore up its capital, stop making certain loans and rein in the rates being offered for customer deposits. After AmTrust missed a deadline to raise capital, the FDIC in January approached other banks to gauge their takeover interest -- a sign the agency was gearing up to seize the thrift, according to people familiar with the matter. Executives figured it was about to meet the same fate as its cross-street rival, National City Corp., which regulators had forced into a sale to PNC Financial Services Group Inc. But AmTrust benefited from the advocacy of politicians, including Rep. Steven LaTourette (R., Ohio), who pleaded with Treasury and White House officials not to kill a second Cleveland bank. Cleveland's Democratic mayor, Frank Jackson -- a critic of National City's forced sale -- also sought to protect AmTrust. At the same time, regulators were hoping that federal rescue programs being rolled out would stem the number of seized banks. The OTS and FDIC eventually agreed to plans by AmTrust to aggressively shrink its balance sheet, sell branches, and thicken its capital cushions, according to people familiar with the matter.
Some banking experts were surprised, since AmTrust appeared in worse shape than National City. Critics viewed the disparate treatment of the two Cleveland banks as an example of inconsistency by regulators. AmTrust's reprieve was short-lived. With home prices falling and commercial real-estate losses mushrooming, AmTrust's finances deteriorated even faster. From March 31 through Sept. 30, AmTrust racked up $418 million in net losses. Its total risk-based capital ratio slumped to 5.44% from 9.28%, leaving AmTrust far below the 8% level needed to be classified as adequately capitalized. 아주경제= 인터넷뉴스팀 news@ajnews.co.kr
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