On the one hand, yesterday was just another Friday. Nine more banks failed, bringing the year's toll to 115. As always, our big list has been updated.
But this Friday was also a bit different, because all nine banks were subsidiaries of the same company, FBOP Corporation. US Bank of Minnesota gobbled up all of FBOP's deposits and almost all of its assets.
All together, FBOP was a sizable bank-holding company, the 46th biggest in the country, according to the Federal Reserve. It had $19.4 billion in assets as of Sept. 30.
But FBOP had large holdings of Freddie Mac and Fannie Mae preferred stock and was hit hard when the government essentially nationalized the two companies last year. FBOP made a number of attempts to save itself. First it applied for $500 million in TARP money, but was turned down. Lately, the Illinois-based company has been petitioning the FDIC for just a little more time. As the Chicago Tribune reports, the bank got help in the effort from Reps. Bobby Rush (D-Ill.) and Danny Davis (D-Ill.) and Sen. Roland Burris (D-Ill.).
The Tribune also notes an unfortunate coincidence for the administration -- and, you might say, a sign of the times we live in. On the morning that FBOP was seized, the community development arm of one of its subsidiaries, Park National Bank, received a $50 million award through a Treasury Department tax credit program, funded in part by stimulus dollars.
FBOP had banks in Illinois, California, Arizona and Texas, the pieces of a company built up over three decades. The largest in California was California National Bank, followed by San Diego National Bank and Pacific National Bank. In Texas, there was North Houston Bank, Madisonville State Bank and Citizens National Bank. In Illinois were Park National Bank and Community Bank of Lemont, and in Arizona, there was just one, Bank USA. All together, the FDIC said the failures will cost the agency $2.5 billion.