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US regulators close small lender in Virginia

Created: 02/28/2014 5:25 PM
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WASHINGTON (AP) — Regulators have closed a small lender in Virginia, marking the fourth U.S. bank failure of 2014 after 24 closures last year.

The Federal Deposit Insurance Corp. said Friday that it has taken over Millennium Bank, N.A., based in Sterling, Va.

The lender, which operated two branches, had $130.3 million in assets and $121.7 million in deposits as of Dec. 31.

WashingtonFirst Bank, based in Reston, Va., has agreed to pay the FDIC a premium of 1 percent to assume Millennium Bank's deposits.

It also agreed to buy essentially all of the failed bank's assets.

Millennium Bank's failure is expected to cost the deposit insurance fund $7.7 million.

U.S. bank failures have been declining since they peaked in 2010 in the wake of the financial crisis and the Great Recession.

Only three banks went under in 2007. That jumped to 25 in 2008, after the financial 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 recession. They declined to 92 in 2011 and fell to 51 in 2012.

Last year, the number of bank failures slowed to 24, still more than normal. In a strong economy, an average of four or five banks close annually.

From 2008 through 2011, bank failures cost the deposit insurance fund an estimated $88 billion, and the fund fell into the red in 2009. With failures slowing, the fund's balance turned positive in the second quarter of 2011.

The fund had a $47.2 billion balance as of Dec. 31, up from $40.8 billion at the end of September.

The FDIC has said it expects bank failures from 2012 through 2016 will cost the fund $10 billion.

(Copyright 2014 by The Associated Press. All Rights Reserved.)



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