Four Banks Fail Today, 13 Bank Failures for 2009

Four banks failed today bringing the 2009 total to 13 (coincidentally on Friday the 13th). This is the first Friday with 4 bank failures during this financial crisis. With so many banks failing on Friday, I've decided to combine the news of all the failures into one post.

The good news for depositors is that for all four closures, the FDIC arranged for all deposits, including those above the FDIC limits, to be transferred to the acquiring banks. However, brokered deposits at two of the four banks are going to be held by the FDIC rather than being transferred to the acquiring bank. These depositors could lose money if they had deposits over the FDIC limits.

As is typical, the acquiring banks have the right to adjust the interest rates, and in all four cases, the banks haven't decided if they'll honor rates on CDs to maturity. Depositors are free to withdraw the money without a penalty, but it could be painful for depositors to lose a rate lock in this current rate environment.

Three out of the four banks had the lowest ratings at both BauerFinancial and Bankrate. However, one of the four had a 3 star rating (performing) at Bankrate. BauerFinancial had already changed their rating to a liquidated status.

I only had posted on one of these banks in the past. Riverside Bank of the Gulf Coast was offering some very competitive CD rates in January. Hopefully, the acquiring bank will honor these CDs to maturity. If you had a CD at Riverside, please let us know what the bank decides.

Here's a summary of the four failures:

10th Bank Failure of 2009 (Nebraska)

• FDIC Press Release
• Closed Bank: Sherman County Bank
• Location: Loup City, NE
• Size: 4 branches, $130 million assets, $85 million deposits
• Possible Uninsured Deposits: ALL deposits Transferred
• Acquiring Bank: Heritage Bank, Wood River, NE
• Estimated Cost to Deposit Insurance Fund: $28 million
• Financial Ratings: ? star at BauerFinancial, 3 stars (performing) at Bankrate.com

11th Bank Failure of 2009 (Florida)

• FDIC Press Release
• Closed Bank: Riverside Bank of the Gulf Coast
• Location: Cape Coral, FL
• Size: 9 branches, $539 million assets, $424 million deposits
• Possible Uninsured Deposits: ALL deposits Transferred EXCEPT brokered deposits
• Acquiring Bank: TIB Bank, Naples, FL
• Estimated Cost to Deposit Insurance Fund: $201.5 million
• Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com

12th Bank Failure of 2009 (Illinois)

• FDIC Press Release
• Closed Bank: Corn Belt and Trust Company
• Location: Pittsfield, IL
• Size: 2 branches, $272 million assets, $234 million deposits
• Possible Uninsured Deposits: ALL deposits Transferred EXCEPT brokered deposits
• Acquiring Bank: The Carlinville National Bank
• Estimated Cost to Deposit Insurance Fund: $100 million
• Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com

13th Bank Failure of 2009 (Oregon)

• FDIC Press Release
• Closed Bank: Pinnacle Bank
• Location: Beaverton, OR
• Size: 1 branch, $73 million assets, $64 million deposits
• Possible Uninsured Deposits: ALL deposits Transferred
• Acquiring Bank: Washington Trust Bank, Spokane, WA
• Estimated Cost to Deposit Insurance Fund: $12.1 million
• Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com

References:

• FDIC list of failed banks
• Recent FDIC and NCUA deposit insurance changes
• 10 Lessons from the 2008 bank failures
• Review of the 2008 credit union liquidations

Thanks to the readers who emailed me news of these closures