Weekend Economists Examine the Root of All Evil: February 28-March 2, 2014

[Demeter]

1. Speaking of money, we have not one but TWO failed banks this evening (so far)

Millennium Bank, National Association, Sterling, Virginia, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with WashingtonFirst Bank, Reston, Virginia, to assume all of the deposits of Millennium Bank, N.A.

The two branches of Millennium Bank, N.A. will reopen as branches of WashingtonFirst Bank during their normal business hours...As of December 31, 2013, Millennium Bank, N.A. had approximately $130.3 million in total assets and $121.7 million in total deposits. WashingtonFirst Bank will pay the FDIC a premium of 1.00 percent to assume all of the deposits of Millennium Bank, N.A. In addition to assuming all of the deposits of the Millennium Bank, N.A., WashingtonFirst Bank agreed to purchase essentially all of the failed bank's assets...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $7.7 million. Compared to other alternatives, WashingtonFirst Bank's acquisition was the least costly resolution for the FDIC's DIF. Millennium Bank, N.A. is the 4th FDIC-insured institution to fail in the nation this year, and the first in Virginia. The last FDIC-insured institution closed in the state was Bank of the Commonwealth, Norfolk, on September 23, 2011.

Vantage Point Bank, Horsham, Pennsylvania, was closed today by the Pennsylvania Department of Banking and Securities, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Choice Bank, Mercerville, New Jersey, to assume all of the deposits of Vantage Point Bank.

The sole branch of Vantage Point Bank will reopen as a branch of First Choice Bank during their normal business hours...As of December 31, 2013, Vantage Point Bank had approximately $63.5 million in total assets and $62.5 million in total deposits. First Choice Bank will pay the FDIC a premium of 1.5 percent to assume all of the deposits of Vantage Point Bank. In addition to assuming all of the deposits of the Vantage Point Bank, First Choice Bank agreed to purchase essentially all of the failed bank's assets...

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $8.5 million. Compared to other alternatives, First Choice Bank's acquisition was the least costly resolution for the FDIC's DIF. Vantage Point Bank is the 5th FDIC-insured institution to fail in the nation this year, and the first in Pennsylvania. The last FDIC-insured institution closed in the state was NOVA Bank, Berwyn, on October 26, 2012.

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Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's banks and savings associations, 6,812 as of December 31, 2013. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its operations.

FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-17-2014