The search for US bank failures grew a little easier this past week when the Federal Deposit Insurance Corporation (FDIC) moved forward in closing an additional 4 institutions. The latest US FDIC-insured institutions to fail, which brings the 2010 failed bank count to 20, include:

• Marco Community Bank – its sole branch has been reopened as a branch of Mutual of Omaha Bank.
• La Coste National Bank – its sole branch will reopen on Monday as a branch of Community National Bank.
• George Washington Savings Bank – its 4 branches will reopen as branches of FirstMerit Bank, N.A.
• La Jolla Bank, FSB – its 10 branches have been reopened as branches of OneWest Bank, FSB.

Marco Community Bank of Marco Island, Florida

This is the 17th FDIC-insured institution to fail in the nation this year, and the third in Florida. Marco Community Bank had approximately $119.6 million in total assets and $117.1 million in total deposits by December 31, 2009. Mutual of Omaha Bank will pay the FDIC a premium of 1.5 percent to assume all of the deposits of Marco Community Bank.

The FDIC and Mutual of Omaha Bank are in the process of sorting out the loss-share transaction on $104.8 million of Marco Community Bank’s assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for this transaction will be $38.1 million.

By using BankProspector to look inside the distressed assets of this failed bank, we can see that Marco Community Bank carried leverage and adequacy ratios of 1% and 2% respectively, and had over $7 million in non-accrual and almost $4 million in OREO. The majority of Marco Community Bank’s issues rested in construction and residential loan types, with almost 30% of its construction portfolio noncurrent.

La Coste National Bank of La Coste, Texas

As the first Texas bank failure of 2010, and the 18th in the country, La Coste National Bank had approximately $53.9 million in total assets and $49.3 million in total deposits by December 31, 2009. Community National Bank will pay the FDIC a premium of 0.51 percent to assume all of its deposits.

The Federal Deposit Insurance Corporation estimates that the cost to the DIF on this bank failure will reach $3.7 million.

La Coste National Bank carried an 8% leverage ratio and capital adequacy ratios over 20%. The failure of this bank may not be real estate related. It appears they were heavy in securities as compared to the their cash and had very little cash on hand. With being only a $50 million bank, things could have gone south very fast with less than $5 million on hand in cash reserves.

George Washington Savings Bank of Orland Park, Illinois

This founding-father bank is the 19th FDIC-insured institution to fail in the nation this year, and the second in Illinois. George Washington Savings Bank had approximately $412.8 million in total assets and $395.3 million in total deposits by December 31,2009. FirstMerit Bank, N.A. will pay the FDIC a premium of 0.31 percent to assume all of the deposits of George Washington Savings Bank.

The FDIC and FirstMerit Bank, N.A. are finalizing the loss-share transaction on $324.2 million of George Washington Savings Bank’s assets, with approximately $141.4 million hitting the DIF.

BankProspector shows distressed asset non-accrual totals at George Washington Savings Bank at over $100 million, OREO levels approaching $20 million, and noncurrent portfolio levels at approximately 41%. While the institution held non-accrual balances across all four (4) loans types that we currently track, the majority of the bank’s distress was in construction and residential.

La Jolla Bank, FSB of La Jolla, California

Only the second bank failure in California in 2010, but the 20th in the nation, La Jolla Bank, FSB had approximately $3.6 billion in total assets and $2.8 billion in total deposits by December 31, 2009. The FDIC and OneWest Bank, FSB entered into a loss-share transaction on $3.31 billion of La Jolla Bank, FSB’s assets. OneWest Bank, FSB did not pay the FDIC a premium for the deposits of La Jolla Bank, FSB. The FDIC estimates that the cost to the DIF will be $882.3 million.

BankProspector allows us to peer below the surface of La Jolla Bank, FSB to determine that significant issues in the institution’s distressed construction loans and residential loan portfolio caused its downfall, where 50% and 16% of assets were noncurrent respectively. Leverage and capital adequacy ratios were all below 2%, and of the latest 4 US bank failures, La Jolla is by far the largest to go down with almost $750 million in distressed asset totals.