Feds close two banks in Phoenix and Gilbert

In yet another sign of the faltering economy, federal and state regulators closed two small Arizona banks yesterday evening, the first institutions headquartered in the state to fail in 2009.

Phoenix-based Community Bank of Arizona and Union Bank in Gilbert were closed, with all deposits of both institutions taken over by MidFirst Bank of Oklahoma City. The daily reports the two banks are the first institutions headquartered in the state to fail in 2009. Read more here.

Community Bank had four branches, and Union Bank had one office. All will open Monday as branches of MidFirst Bank. Both banks were covered by Federal Deposit Insurance Corporation (FDIC) insurance, which protects depositors against loss.

Last July, Seeing Red AZ reported that First National Bank, Arizona’s largest locally based bank and a specialist in lower-quality mortgages, was closed by regulators. Federal banking regulators closed 28 branches of 1st National Bank of Nevada and First Heritage Bank, operating in Nevada, Arizona and California. The banks were owned by Scottsdale-based First National Bank Holding Co.

Also shut down yesterday was Colonial BancGroup Inc., a major lender in real estate development — marking the most significant U.S. bank failure this year —  and a small bank in Pennsylvania. The closures boosted to 74 the number of federally insured banks that have failed in 2009, according to an AP report. The FDIC was appointed receiver of the Alabama-based Colonial, with about $25 billion in assets.

Click here to view the 7-page FDIC list of bank closings since October 1, 2000.

3 Responses to Feds close two banks in Phoenix and Gilbert

  1. papatodd says:

    But OBungle and Rahm said that they have pulled us back from the brink of catastophe. How could this be? Even though unemployment is up, foreclosures are up, deficit is up, gdp is down and sales are down, it’s all OK now, right?

  2. Jonathan says:

    Not to make light the AZ closures, but the failure of Colonial Bank is a major event! A bank with $25 BILLION in assets being shut down by the feds is huge! This is mega example of the terrible home lending practices that have brought down so many other banks. Making loans to unqualified people, many of them illegals, was the demise of the banking industry but did a great job for political correctness. When the recipients of this bizarre generosity were unable to keep up the payments on loans they were unqualified to receive in the first place, the rest of us paid for the bailout. The bank failures are but another example of why illegals need to be back in their own homeland.

  3. sherriaz says:

    Housing loans to illegals is one part of the problem as are loans that were made to illegals for business development. I remember an article in BusinessWeek many years ago wherein the author was rapturously recounting how Hispanics with no collateral were being helped along with loans so that they could buy food service trucks, start lawncare and cleaning businesses and receive very favorable rates.

    Meanwhile, lacking a Hispanic surname and immigrant status needed for this level of support, our family business was denied a business loan which would have allowed us to expand. Illegals who obtained loans were able to set up businesses in direct competition with us thanks to “affirmative action”.

    Anybody wonder why many small business people want illegals removed permanently from this country? For every small business person who claims to need their labor, there are 2 or more who are forced into competition with illegals who undercut reasonable bids.

    Banks who practiced this kind of lending deserve to be put out of business. Too bad we are stuck bailing them out.