Regulators close three more banks

By Chris Carey, Bailout Sleuth

Regulators closed three more banks on Friday, pushing the number of failures this year to 84.

The institutions seized this week were Affinity Bank, in Ventura, Calif.; Mainstreet Bank in Forest Lake, Minn.; and Bradford Bank in Baltimore.

The Federal Deposit Insurance Corp. said the closings would cost its deposit insurance fund an estimated $446 million. The wave of bank failures this year has cut the amount in the insurance fund from $13 billion in the first quarter to $10.4 billion at the end of June. The current total is the lowest since 1993.

The California Department of Financial Institutions seized Affinity Bank, which had $1 billion in assets, and appointed the FDIC as receiver. It arranged for Pacific Western Bank, of San Diego, to take over the failed bank’s 10 branches and its $922 million in deposits.

Pacific Western also agreed to buy virtually all of Affinity’s assets, with $934 million of the amount subject to a loss-sharing arrangement with the FDIC.

Minnesota regulators closed Mainstreet Bank, which had $459 million in assets. The FDIC arranged for Central Bank, of Stillwater, Minn., to take over Mainstreet’s 10 branches and $434 million in deposits. Central paid a 0.1 percent premium for the deposits.

Central also bought most of the failed bank’s assets, with $268 million subject to a loss-sharing arrangement.

The Office of Thrift Supervision seized Bradford Bank and appointed the FDIC as receiver. Manufacturers and Traders Trust Co., of Buffalo, N.Y., agreed to absorb Bradford’s nine branches and its $383 million in deposits. It also agreed to buy essentially all of its $452 million in assets, with $338 million of that amount covered by loss-sharing arrangements with the FDIC.

Manufacturers and Traders, better known as M&T Bank, counts billionaire investor Warren Buffett’s Berkshire Hathaway Inc. among its large shareholders.

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