New York - Florida's Freedom Bank was the 17th US bank to be seized by regulators this year amid the widening credit crisis and worst housing slump since the Great Depression of the 1930s, reports said Saturday. The state's Office of Financial Regulation on Friday closed the bank, which had 287 million dollars in assets and 254 million dollars in deposits, according to a statement from the Federal Deposit Insurance Corp (FDIC).
Freedom Bank was to be acquired by Fifth Third Bank of Grand Rapids, Michigan, which will buy 36 million dollars of assets. Fifth Third was to pay a premium of 1.16 per cent, about 2.9 million dollars, to assume the deposits, FDIC said.
The remaining assets, mainly loans, will be retained by FDIC to dispose off later. As of June 30, Freedom Bank had about 214 million dollars in loans, CNN reported.
This year's collapse of Washington Mutual Inc and IndyMac Bancorp Inc have been among the largest in US banking history. Washington Mutual sold its assets to JPMorgan Chase in September, while Wachovia Corp, the sixth-largest bank, was being bought by Wells Fargo for 11.7 billion dollars.
The financial crisis led to the passage of a 700-billion-dollar rescue plan and the US Treasury Department will use some of this to buy 250 billion dollars in preferred shares in nine banks.
Fifth Third has received 3.5 billion dollars as part of the bail- out package, according to CNN.
FDIC oversees 8,451 institutions with 13.3 trillion dollars in assets and insures deposits of up to 250,000 dollars per depositor per bank.
