US Regulators Close Five Banks In Four States

(Adds detail in second paragraph.)

WASHINGTON -(Dow Jones)- U.S. regulators closed five more banks in four states Friday evening, as a still-weak economy continues to batter the banking industry.

Federal regulators said banks in Georgia, Florida, Washington and Oregon have failed, bringing the 2010 total to 108. The pace of failures so far this year far outstrips that of 2009, which still saw high numbers of closures. At this point last year regulators had shuttered 69 banks.

The Federal Deposit Insurance Corp. said the five failures would cost its insurance fund nearly $335 million.

The largest failure occurred in Oregon, where Eugene-based LibertyBank was seized by regulators. The bank had total assets of $768.2 million and total deposits of $718.5 million as of the end of March.

The FDIC said Home Federal Bank, based in Nampa, Idaho, agreed to assume all of the failed bank's deposits and purchase approximately $419.7 million of its assets.

Also out west, regulators closed the Cowlitz Bank, in Longview, Wash., which had $529.3 million in assets and $513.9 million in deposits as of the end of March. Cowlitz had nine branches, including two in Oregon and three in Washington operating under the name Bay Bank.

Regulators said that Olympia-based Heritage Bank had agreed to assume all of the deposits and purchase $329.5 million of the failed bank's assets. The FDIC will retain the rest of the assets from the failed bank, to sell later.

Two banks in Florida failed, with Centennial Bank, of Conway, Ark., agreeing to assume all of the deposits and essentially all of the assets of both.

The Florida Office of Financial Regulation seized Panama City Beach-based Coastal Community Bank, which had $372.9 million in assets, $363.2 million in deposits and 11 branches.

The Office of Thrift Supervision seized Port Saint Joe-based Bayside Savings Bank, which had $66.1 million in assets, $52.4 million in deposits and two branches. OTS said that Bayside Savings Bank was closed because it was "undercapitalized, with no reasonable prospect of becoming adequately capitalized."

Regulators also seized NorthWest Bank and Trust of Acworth, Ga., which had approximately $167.7 million in assets and $159.4 million in deposits as of March 31.

The Federal Deposit Insurance Corp. arranged for Macon-based State Bank and Trust Co. to assume all of the failed bank's deposits and essentially all of its assets.

Separately, the FDIC announced Friday that it sold securities backed by $471.3 million of performing single-family mortgages from 16 failed banks. The agency said the pilot program is the first time it has sold assets in a securitization "in the current financial crisis."

The FDIC has been looking for ways to unload the assets it has acquired from taking over hundreds of failed banks since 2007. The regulator has been eager to tap the securitization market, especially given the robust demand for such issues from investors looking for higher yields and safe investments.