The most recent fatality in the commercial banking sector was a South Carolina based bank, the 42nd of the year. Beach First had $585 million in assets and cost the FDIC fund over $100 million. Defaults on residential and commercial loans are still driving up bank defaults. Defaults may reach 140 for 2008 and 2009.
According to Bloomberg, BNC Bancorp, the North Carolina- based lender with $1.6 billion in assets, purchased a Myrtle Beach, South Carolina bank as the number of U.S. bank failures this year climbed to 42.
Federal bank regulators closed Beach First National Bank yesterday and named the Federal Deposit Insurance Corp. as receiver, according to a statement on the FDIC Web site. BNC’s lender, Bank of North Carolina, purchased Beach First and most of its $585.1 million in assets. The collapse cost the FDIC’s deposit-insurance fund $130.3 million.
“Beach First’s excellent customer base was a significant attraction to our company in considering this transaction,” BNC Bancorp Chief Executive Officer W. Swope Montgomery Jr. said in a statement. Bank of North Carolina picks up seven branches in the transaction.
Lenders are collapsing amid losses on residential and commercial real estate loans. U.S. “problem” banks climbed to the highest level since 1992 in the fourth quarter and FDIC Chairman Sheila Bair warned Feb. 23 that the pace of failures may exceed last year’s total of 140.
BNC counts as a board member Charles T. Hagan, husband of Senator Kay Hagan, a North Carolina Democrat. Beach First is the only South Carolina bank to have failed since Oct. 1 2000, the FDIC said.