Regulators close Michigan bank

By Salon Staff

Published March 30, 2012 10:09PM (EDT)

WASHINGTON (AP) — Federal regulators have closed a bank in Michigan, bringing to 16 the number of banks that have failed in 2012.

The Federal Deposit Insurance Corp. said Friday that it shuttered Fidelity Bank based in Dearborn, Mich.

The bank, with 15 branches, had about $818.2 million in assets and $747.6 million in deposits as of Dec. 31.

The Huntington National Bank of Columbus, Ohio, agreed to assume Fidelity Bank's deposits and buy essentially all of its assets.

The FDIC estimates that Fidelity Bank's failure will cost the insurance fund $92.8 million.

Fidelity Bank is the first FDIC-insured institution in Michigan to fail this year.

The pace of bank closures has slowed sharply after ballooning following the financial crisis in 2008. By this time last year, 26 banks had failed.

In 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. Those failures cost the fund around $23 billion. The FDIC has said 2010 likely was the high-water mark for bank failures from the Great Recession.

Last year, 92 banks failed, costing the fund about $7.9 billion.

In 2009 there were 140 bank failures that cost the fund about $36 billion. That was more than in 2010 because the banks involved were bigger on average. Twenty-five banks failed in 2008, the year the financial crisis struck. Only three closed in 2007.

From 2008 through 2010, bank failures cost the fund an estimated $79 billion. The FDIC expects failures from 2011 through 2015 to cost $19 billion.

The deposit insurance fund fell into the red in 2009. With failures slowing, the FDIC's fund balance turned positive in the second quarter of last year.

At Dec. 31 it stood at $9.2 billion, nearly 18 percent higher than three months earlier, according to the FDIC.

Salon Staff

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