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WASHINGTON, D.C. (BNO NEWS) -- Federal regulators on Friday evening closed five banks in California, South Carolina, Minnesota, and Maryland, bringing the total number of bank failures in the United States so far this year to 22.
The largest bank to be closed on Friday was the Plantation Federal Bank which had its headquarters in the town of Pawleys Island in South Carolina. The bank, which had a total of six branches, was closed by the state's Office of the Comptroller of the Currency (OCC) after its regular closing time.
After the closing, the Federal Deposit Insurance Corporation (FDIC) said it immediately entered into a purchase and assumption agreement with the First Federal Bank in Charleston to assume all of the deposits of Plantation Federal Bank. As of December 2011, Plantation Federal Bank had approximately $486.4 million in total assets and $440.5 million in total deposits.
Most customers should see no or little service disruptions despite the closure of the institution as the Plantation Federal Bank's six branches will reopen on Monday as branches of First Federal Bank, and all depositors of Plantation Federal Bank will automatically become depositors of First Federal Bank.
All of the services of the failed bank, including checks, ATM and debit cards, will remain active. "Checks drawn on the bank will continue to be processed," the FDIC said in a statement. "Loan customers should continue to make their payments as usual."
Federal regulators also closed the Inter Savings Bank based in Maple Grove, Minnesota; the Bank of the Eastern Shore in Cambridge, Maryland; the HarVest Bank of Maryland in Gaithersburg, Maryland; and the Palm Desert National Bank in Palm Desert, California. All the banks were assumed by another bank, except the Bank of the Eastern Shore.
"To protect the depositors, the FDIC created the Deposit Insurance National Bank of Eastern Shore (DINB), which will remain open until May 25, 2012 to allow depositors access to their insured deposits and time to open accounts at other insured institutions," the FDIC said in a statement. "All insured depositors of Bank of the Eastern Shore are encouraged to transfer their insured funds to other banks during this transitional period."
The FDIC estimated that the combined cost of all five bank failures to the Deposit Insurance Fund (DIF) will be around $272.6 million, but said it was the least costly resolution for the DIF compared to other alternatives. Friday's closures bring the total number of U.S. bank failures so far this year to 22. There were 91 bank failures in 2011 and 157 bank failures in 2010.
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