- Closed Bank: Integrity Bank
- Location: Alpharetta, Georgia
- Size: 5 branches, $1.1 billion assets, $974 million deposits
- Possible Uninsured Deposits: ALL deposits transfered to new bank
- Acquiring Bank: Regions Bank, Birmingham, Alabama
- Cost to Deposit Insurance Fund: $250 million to $350 million (estimated)
- 2008 closures: 10th bank to be closed this year
- Financial Ratings: 0 stars at BauerFinancial, 1 star at Bankrate.com
No depositors will be losing any money. According to the press release:
All depositors of Integrity Bank, including those with deposits in excess of the FDIC's insurance limits, will automatically become depositors of Regions Bank for the full amount of their deposits, and they will continue to have uninterrupted access to their deposits.
That's good news for any depositors who may have been over the FDIC limits, but you have to wonder if this is more costly for the FDIC. Coincidentally, one of the other failed banks this year in which the FDIC covered all unisured deposits had a similar name, First Integrity (see post). However, bank customers should not consider this to be typical. The FDIC didn't seem to cover any of the uninsured deposits after a Kansas bank failed last week. For IndyMac's failure, the FDIC immmediately paid out only 50% of uninsured deposits.
Good News for Integrity CD Customers
According to this FDIC FAQ, "Regions Bank will honor all current non-brokered CDs to maturity." In addition, you still have the option to make a penalty-free withdrawal. From this FAQ, "You may withdraw funds from any transferred account without an early withdrawal penalty until you enter into a new deposit agreement with the Regions Bank." So depositors get the best of both worlds.
I have posted on many CD deals from Integrity Bank over the last couple of years. Their most recent deal was a 4.50% 6-month CD and a 5% 30-month CD. They also had been offering a 5% reward checking account. In my last Integrity post, I referenced a newspaper article describing the problems of this bank. They had hired a new CEO last year who had been a former bank regulator turned fix-it guy for banks. I guess this was too much for him to fix.
Here's the FDIC list of all the recent bank failures. For more info on FDIC coverage, please refer to my Facts about FDIC and NCUA post. For issues on FDIC and NCUA coverage above $100K, please refer to this recent post.
Thanks to the readers who notified me of this news.