Cape Fear Bank Becomes Bank Failure #22 of 2009

Another Friday, another bank failure. Federal regulators on Friday shut down Cape Fear Bank of Wilmington, North Carolina. The failure of Cape Fear Bank brought the number of U.S. bank failures this year to 22.

From the FDIC: Cape Fear Bank, Wilmington, North Carolina, was closed today by the North Carolina Office of Commissioner of Banks, which then appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase agreement with First Federal Savings and Loan Association of Charleston (First Federal), Charleston, South Carolina, to assume all of the deposits of Cape Fear Bank.

As of March 31, 2009, Cape Fear Bank had total assets of approx. $492 million and total deposits of $403 million. In addition to assuming all of the deposits of the failed bank, First Federal agreed to purchase approximately $468 million in assets. The FDIC will retain the remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $131 million. First Federal’s acquisition of all deposits was the “least costly” resolution for the FDIC’s Deposit Insurance Fund compared to alternatives.

The state of North Carolina had not seen a bank failure since 1993, when Crown National Bank of Charlotte, N.C., went belly-up.

Of the 8,500 federally insured banks and thrifts, the FDIC has 252 banks on its list of troubled institutions, more than double from 117 in June 30, 08.

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