Bank failure in Missouri brings 2012 total to 42

[September 15, 2012]  WASHINGTON (AP) -- Regulators on Friday closed a small bank in Missouri, bringing to 42 the number of U.S. bank failures this year.

The Federal Deposit Insurance Corp. said it seized Truman Bank, based in St. Louis.

The bank had about $282.3 million in assets and $245.7 million in deposits as of June 30.

Simmons First National Bank, based in Pine Bluff, Ark., agreed to assume Truman Bank's deposits and purchase essentially all of the failed lender's assets.

The FDIC and Simmons entered into a loss-share transaction on $117.8 million of Truman Bank's assets.

The failure of Truman Bank, which had four branches, is expected to cost the deposit insurance fund $34 million.

Truman Bank is the second FDIC-insured institution in Missouri to fail this year.

U.S. bank closures are running at a slower pace than in 2011. Seventy banks had failed by this time last year.

Bank closures peaked in 2010 in the wake of the financial crisis, but have been declining ever since. In 2007, just three banks went under. That number jumped to 25 in 2008, after the meltdown, and ballooned to 140 in 2009.

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

From 2008 through 2011, bank failures cost the fund an estimated $88 billion. The deposit insurance fund fell into the red in 2009. But with failures slowing, the fund's balance turned positive in the second quarter of last year. By Dec. 31, it stood at $11.8 billion, according to the FDIC.

The FDIC expects failures from 2012 through 2016 to cost $12 billion.

[Associated Press]

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.