Four US banks fail, year's total hits 41

Four small banks across the United States were seized by regulators on Friday, ticking up this year's tally of bank failures to 41. The continued parade of bank collapses comes as the Federal Deposit Insurance Corporation (FDIC) is pulling back on loss-share agreements designed to lure bidders into taking on the assets of troubled banks. Two of the banks that were seized were in Georgia, which has accounted for about one-sixth of all failures since the beginning of 2008. Unity National Bank of Cartersville, Georgia, had about $292.2 million (Dh1.07 billion) in assets, and McIntosh Commercial Bank of Carrollton, Georgia, had about $362.9m in assets, the FDIC said. Georgia is paying the price for overly aggressive lending during the housing boom, particularly speculative commercial real estate loans. The other two institutions that failed were Key West Bank of Key West, Florida, which had $88m in assets, and Desert Hills Bank of Phoenix, Arizona, which had $496.6m in assets. The FDIC found buyers for the deposits of all four banks, and entered into loss share agreements. The FDIC said it has reduced the amount of losses it is willing to share with buyers of failed banks, indicating the agency's increased confidence in the market for these banks' assets and in the overall economy. The agency said it will no longer take on 95 per cent per cent of the share of potential losses for certain assets of failed banks. It will continue an 80/20 loss share in some transactions. "As a result of better pricing, more competitive bidding and an improving economy the FDIC feels that it can explore this step," an agency spokesman said.