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Bank Failures Top 61, Costing FDIC $253.4M

Total bank failures leveled out at 61 over last week as three more financial institutions faced closure and acquisition by other banks. The failed banks included institutions in Indiana, Virginia, and South Carolina, according to the ""FDIC"":http://www.fdic.gov/, with the federal agency left to pick up the $253.4 million tab.

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According to ""statements"":http://www.fdic.gov/news/news/press/2011/index.html, Evansville-based Integra Bank, Richmond-based Virginia Business Bank, and Columbia-based Bank Meridian all shuttered their doors, with $2.2 billion, $95.8 million, and $239.8 million in assets at the time of closing, respectively.

Deposits at the time of closing for the three institutions finished at $1.9 billion, $85 million, and $215.5 million in assets, also respectively. The ""Office of the Comptroller for the Currency"":http://www.occ.treas.gov/ closed the doors at Integra and Bank Meridian, while Virginia regulatory commissioners confiscated the keys from Virginia Business.

The FDIC negotiated purchase and assumption agreements with three private institutions across the country.

By agreeing to the $1.2 billion cost-share transaction, ""Old National Bank"":https://www.oldnational.com/index.asp will take over Integra, the largest of the tree, and rebrand its 52 branches across Indiana.

""South Carolina Bank and Trust"":http://www.scbtonline.com/ (SCBT) and ""Xenith Bank"":https://www.xenithbank.com/index.htm will acquire BankMeridian and Virginia Business Bank, costing the FDIC $65.4 million and $17.3 million, respectively.

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Representatives for the Old National Bank could be immediately reached for comment.

FDIC spokesperson Greg Hernandez paints the numbers in colors of recovery, saying that bank failures are lower this year than at the same time last year.

""We certainly have turned a corner on bank failures,"" he tells _MReport_. ""The pace has actually backed off quite a bit"" given the number of larger institutions that failed last year.

Although Integra marks one of the largest bank failures to date, Hernandez says, the other failures, largely comprised by community banks with less than $10 billion in assets, still closed shop with portfolios heavy in commercial real estate and general construction loans.

In a ""statement"":http://www.scbtonline.com/news.aspx?article_id=135, Robert Hill, Jr., SCBT Financial Corporation's president and CEO, said ""[t]his should be a very seamless transition for the BankMeridian customers. BankMeridian depositors have not lost any money in this transaction. We look forward to the opportunity of serving our new customers.""

At least one acquirer, Old National Bank, plans changes for a closed institution, according a related story published by the ""_Chicago Tribune_"":http://www.chicagotribune.com/news/chi-ap-in-integrabank-closu,0,1375343.story. Old National Bank president and CEO Bob Jones said that the acquiring bank would slash branch managers and other managers at about 160 branch locations across three states over the next month.

""Obviously, we've got branches that are right across the street from the Integra locations,"" the _Tribune_ reported Jones as saying. ""We've got redundant functions, and so we talked a little bit about how the transition will go and when we'll make decisions and how we'll communicate those.""

The three failures brings the total to 61 this year, according to the Web site for the FDIC.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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