Home > Money News > New Frontier Bank and Cape Fear Bank Fail in Wilmington NC and Greeley CO

New Frontier Bank and Cape Fear Bank Fail in Wilmington NC and Greeley CO

April 11th, 2009

capefearThe number of banks that have failed in 2009 has risen to 23 with New Frontier Bank of Greeley CO and Cape Fear Bank of Wilmington NC being the latest two to be shut down by federal regulators. No bank has failed in North Carolina in 16 years while New Frontier Bank is the second bank to fail in Colorado this year.

The FDIC did not get a buyer for New Frontier Bank but instead created the Deposit Insurance National Bank of Greeley which will be managed by Bank of the West of San Fransisco for 30 days to allow customers to find new banks.

New Frontier had $2 billion in assets and $1.5 billion in deposits of which $4 million may be over the FDIC insured limit of $250,000.

Cape Fear Bank is being sold to the First Federal Savings and Loan Association of Charleston located in South Carolina. First Federal is retaining Cape Fear Bank’s $403 million in deposits and $468 million of its $492 million in assets. The remaining $24 million in assets will be seized by the government and liquidated.

In a little over 3 months 2009 has seen almost as many bank failures as we saw in 2008 with 23 this year and 25 from all of last year. With more individuals and businesses defaulting on their loans banks come with a greater risk of failing.

The FDIC insurance fund fell to $19 billion by the end of 2008 this is down from $52 billion at the end of 2007. The FDIC does not get its fund from tax payer’s but from charging banks fees for participating in the FDIC. I have to say that the FDIC has done a good job with the bank failures. Without them this recession would have been much more catastrophic. Also, let this serve as a lesson to always stay under the FDIC insured limit of $250,000.

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