(A correction published at 8 p.m. "CORRECT: Regulators Close
United Western Bank, Three Others," provided an incorrect ticker
symbol for First Bancorp in the eighth paragraph. The original
story "UPDATE: Regulators Close United Western Bank, Three Others,"
published at 7:48 p.m. miscounted the number of failures in the
last paragraph. The correct version follows:)
DOW JONES NEWSWIRES
U.S. regulators Friday announced the failure of United Western
Bancorp Inc.'s (UWBK) banking subsidiary, while three banks in the
U.S. Southeast also closed as smaller institutions continue to
struggle in the weak economy.
United Western Bancorp shares fell 7.9% to 35 cents after hours
before trading was halted.
The Federal Deposit Insurance Corp. said Denver-based United
Western Bank, South Carolina-based Community South Bank and Trust
and North Carolina-based Bank of Asheville were all being acquired
by separate banks.
To handle the failure of Georgia-based Enterprise Banking Co.,
the smallest of those closed Friday, the agency said it created a
bank to provide transitional services to customers until Friday,
encouraging them to transfer their accounts to other banks.
The failures bring 2011's tally of closed banks to seven. The
number of banks that failed last year--157--was the highest since
the savings-and-loan crisis ended in 1992, although the total
assets at those fallen banks was much smaller than the total the
year before. That's because the trend has shifted to smaller banks
that serve struggling local economies from larger banks that took
on too much housing risk.
The largest bank, United Western Bank, was closed by the Office
of Thrift Supervision. It had about $2.05 billion in total assets
and $1.65 billion in total deposits with eight branches as of Sept.
30.
First-Citizen Bank & Trust Co. agreed to assume all the
deposits and entered a loss-share deal with the FDIC on $1.11
billion of the assets. The acquiring company started in North
Carolina but now has 370 branches in the Southeast as well as
California, Colorado--where it will now have 11 branches--and
Washington state.
CommunitySouth Bank in South Carolina had about $440.6 million
in assets and $402.4 million in deposits with six branches, while
Bank of Asheville in North Carolina had about $195.1 million in
total assets and $188.3 million in deposits with five branches.
Their deposits and essentially all their assets are being assumed,
respectively, by a subsidiary of Blue Ridge Holdings Inc. called
CertusBank and First Bancorp's (FBNC) banking subsidiary First
Bank.
Depositors at the failed banks will automatically become
depositors at the new banks, and their deposits will continue to be
insured by the FDIC. The FDIC insures deposits for up to $250,000
per depositor.
Enterprise Banking in Georgia had $100.9 million in assets and
$95.5 million in deposits. The FDIC said all government direct
deposits, including Social Security checks, have been redirected to
United Community Bank in Blairsville, Ga. Banking activities, such
as writing checks, ATM and debit card withdrawals, can continue
normally for former customers of Enterprise Banking under the aegis
of the FDIC-created bank Deposit Insurance National Bank of
McDonough until Friday at Enterprise's normal locations. Official
checks of Enterprise Banking will continue to clear and will be
issued to customers who will be closing their accounts.
The FDIC estimated that the cost of the four failures to the
Deposit Insurance Fund will be $454.9 million.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com