Eight More Community Banks Fold

The hits keep coming for small and mid-sized banks. Over the weekend, regulators shut down eight â€" three in Florida, two in California, and one each in Massachusetts, Michigan, and Washington. Altogether, this latest round of closures will cost the FDIC $985 million, and brings the total number of failed banks for the year to 50.

[IMAGE] ""TD Bank, N.A."":http://www.tdbank.com, which is part of Toronto-Dominion Bank in Canada, acquired the banking operations, including all deposits and loan assets, of the three Florida-based institutions: ""AmericanFirst Bank"":http://www.americanfirstbank-florida.com in Clermont, ""First Federal Bank of North Florida"":http://www.ffbnf.com in Palatka, and ""Riverside National Bank of Florida"":http://www.riversidenb.com in Fort Pierce. The deal gives TD Bank 69 new branch locations in what the institution called the ""deposit-rich Florida market.""

AmericanFirst had total deposits of $81.9 million and assets of $90.5 million. First Federal Bank had $324.2 million in deposits and $393.3 million in assets. Riverside National had $2.76 billion in deposits and $3.42 billion in assets.

TD Bank said in a press statement that the acquisitions ""come with limited downside credit risk."" The institution and the FDIC entered into a loss-share agreement on $2.2 billion of the failed institutions' assets. Initially, TD Bank and the federal agency will share in the losses on a 50/50 basis, the FDIC said.

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""Tamalpais Bank"":http://tambank.com in San Rafael and ""Innovative Bank"":http://www.innovativebank.com in Oakland are the latest California casualties.

Tamalpais Bank, with seven branches, $487.6 million in deposits, and $628.9 million in assets, was bought by ""Union Bank N.A."":http://www.unionbank.com of San Francisco. Union Bank paid the FDIC a premium of 2.0 percent for the deposits, and entered into a loss-share transaction with the federal agency on $522.3 million of the failed bank's assets.

Innovative Bank had four branches, $225.2 million in deposits, and $268.9 million in assets. Los Angeles' ""Center Bank"":http://www.centerbank.com agreed to acquire it, paying a premium of 0.5 percent for the deposits, and sharing losses with the FDIC on $178.1 million of the assets.

""Butler Bank"":http://www.butlerbank.com in Lowell, Massachusetts was also shut down. The FDIC brokered a deal with ""People's United Bank"":http://www.peoples.com of Bridgeport, Connecticut to take over the failed bank's four branches, assume all of its $233.2 million in deposits (for no premium), and purchase its $268 million in assets. The FDIC and People's United will share losses on $206.1 million of Butler Bank's assets.

In Michigan, Sterling Heights' ""Lakeside Community Bank"":http://www.banklakeside.com has gone under. The FDIC was unable to find another institution to take over the failed bank and approved the payout of insured deposits. Lakeside Community Bank had deposits of approximately $52.3 million and assets totaling $53 million.

The eight-branch ""City Bank"":https://www.citybankwa.com in Lynnwood, Washington was also seized. ""Whidbey Island Bank"":http://www.wibank.com of Coupeville, Washington stepped in, acquiring the failed bank's $1.02 billion in deposits for a premium of 1.0 percent. Whidbey Island Bank also purchased $704.1 million of City Bank's $1.13 billion in assets, of which the FDIC agreed to share in the losses on $455.6 million.

In the transaction with Whidbey Island Bank, as well as California's Center Bank, the FDIC acquired a ""value appreciation instrument,"" which allows the federal agency to share in some of the profit if the stock price of the acquiring institution goes up over a set period of time.