State banking regulators closed two Maryland banks Friday, the first two bank failures in the state since 2010.
The Maryland Commissioner of Financial Regulation shut down the Bank of the Eastern Shore in Cambridge and appointed the Federal Deposit Insurance Corporation as receiver. The FDIC created the Deposit Insurance National Bank of Eastern Shore to allow customers to access their deposits until May 25.
The state financial commissioner also closed HarVest Bank of Maryland in Gaithersburg, whose deposits and other assets were acquired by Sonabank in McLean, Va. HarVest's four branches will reopen during normal business hours as Sonabank's branches.
Harvest had $164.3 million in total assets.
The Bank of the Eastern Shore had $166.7 million in assets. The FDIC is encouraging that bank's customers to transfer their funds to other banks during the transitional period.
Bank deposits of up to $250,000 are insured by the FDIC.
Maryland Commissioner of Financial Regulation Mark Kaufman said his office had been closely monitoring the two banks, whose efforts to raise capital or sell themselves were unsuccessful.
The board of directors of both banks voted to turn over the institutions to state regulators.
"Unfortunately, both institutions were significantly impacted by the economic and real estate downturn and were unable to find additional capital to restore themselves to sound condition," Kaufman said. "At the same time, these are isolated instances and the banking system in our state remains safe and sound."
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