Banking regulators closed First International Bank in Plano, TX, last week, the 26th bank failure in the third quarter — a nearly 56% decrease in bank failures compared to the same quarter a year ago.
While the number of bank closures is dwindling, one thing hasn’t changed: commercial real estate lending continues to make up the largest percentage of the failed banks’ activities. Two-thirds of the lending activity at the 26 failed banks was for CRE-related loans.
The banks had total distressed commercial real estate assets of $2.1 billion, which represented 21% of their total assets of $9.6 billion.
Of the distressed CRE totals, delinquent loans accounted for $1.15 billion of the assets, with nearly 87% of that seriously delinquent.
The banks had restructured $476 million of the commercial real estate loans on their books. Of that amount, nearly half was delinquent again.
Foreclosed property holdings accounted for $426 million of the total distressed assets.
Through the first two quarters of the years, the 26 banks had lost a collective $248 million.
First International Bank
The Texas Department of Banking closed First International bank and appointed the Federal Deposit Insurance Corp. (FDIC) as receiver.
The FDIC entered into a purchase and assumption agreement with American First National Bank in Houston to assume all of the deposits and seven branches.
As of June 30, First International Bank had $239.9 million in total assets, most of which American First National Bank agreed to purchase.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $53.8 million. First International Bank was the first bank to fail in Texas this year.