MercoPress. South Atlantic News Agency

US regulators seize 17th bank of 2008; 117 with “problem”

Freedom Bank of Bradeton, Florida, in the United States became the 17th US bank to be seized by regulators in 2008, as the heaviest housing slump since the days of the “Great Depression” of the 1930 continues to trigger heaving losses.

The Freedom Bank in one of the US areas hardest hit by the housing slump, reportedly has assets of 287 million USD and 254 million USD in deposits was shut down by regulators on Friday. The Federal Deposit Insurance Corp was named the receiver of the bank. Fifth Third Bancorp of Cincinnati will assume the deposits and buy 36 million USD of assets, the FIDC said. Freedom's four offices will open Monday as Fifth Third branches. US regulators have closed the most banks this year since 1993, and the collapses of Washington Mutual Inc and Indy Mac Bancorp were among the biggest in history. The housing slump and tight credit led to enactment of a 700 billion USD bank-rescue plan and the US Treasury is using the fund to buy 250 billion in preferred shares in banks. Regulators in August closed First Priority Bank, also based in Bradenton, which is south of Tampa on Florida's Gulf Coast. Fifth Third last week announced it will sell 3.45 billion USD in preferred shares and warrants as part of the Treasury Department's plan to boost bank capital ratios and promote lending. The FDIC in August anticipated that 117 banks were classified as "problem" in the second quarter, a 30% jump from the first quarter. The agency, which doesn't name "problem" lenders, will update its assessment in November. The U.S. closed 27 banks from October 2000 through the end of last year, according to a list at fdic.gov. "Banks overall are very well capitalized'' FDIC Chairman Sheila Bair told the US Senate Banking Committee on October 23. "We have some banks with some challenges, but the vast majority is well capitalized".