US regulators close fourth-largest bank
Source: Agencies |
December 6, 2009, Sunday
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Print Edition
Print Edition
REGULATORS on Friday shut down Ohio's AmTrust Bank, the fourth largest American bank to fail this year.
They also closed five others, bringing to 130 the number of US banks to be brought down so far in 2009 by recession and mountains of bad debt.
The Federal Deposit Insurance Corp took over AmTrust Bank, based in Cleveland, with about US$12 billion in assets and US$8 billion in deposits. Its failure is expected to cost the federal deposit insurance fund an estimated US$2 billion.
Just last week, the federal Office of Thrift Supervision put restrictions on AmTrust because of concern that its reserves against losses were dangerously low. Regulators told the bank to limit new loans for land acquisition, development or speculative residential construction.
New York Community Bank, based in Westbury, New York, agreed to assume the deposits of AmTrust Bank and about US$9 billion of its assets. The FDIC will retain the rest for eventual sale.
AmTrust's 66 branches were scheduled to reopen starting yesterday as offices of New York Community Bank, the FDIC said. Also seized by the FDIC were three Georgia banks, and Benchmark Bank in Illinois.
As the economy has soured, bank failures have accelerated and the FDIC expects the cost of the failures to grow to about US$100 billion over the next four years.
They also closed five others, bringing to 130 the number of US banks to be brought down so far in 2009 by recession and mountains of bad debt.
The Federal Deposit Insurance Corp took over AmTrust Bank, based in Cleveland, with about US$12 billion in assets and US$8 billion in deposits. Its failure is expected to cost the federal deposit insurance fund an estimated US$2 billion.
Just last week, the federal Office of Thrift Supervision put restrictions on AmTrust because of concern that its reserves against losses were dangerously low. Regulators told the bank to limit new loans for land acquisition, development or speculative residential construction.
New York Community Bank, based in Westbury, New York, agreed to assume the deposits of AmTrust Bank and about US$9 billion of its assets. The FDIC will retain the rest for eventual sale.
AmTrust's 66 branches were scheduled to reopen starting yesterday as offices of New York Community Bank, the FDIC said. Also seized by the FDIC were three Georgia banks, and Benchmark Bank in Illinois.
As the economy has soured, bank failures have accelerated and the FDIC expects the cost of the failures to grow to about US$100 billion over the next four years.
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