Dedicated to Deposits: Deals, Data, and Discussion

Four Bank Failures Today - 26th to 29th Failures for 2009

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This was a busy day for the FDIC. Four banks were closed today: American Southern Bank in Georgia, Michigan Heritage Bank, First Bank of Beverly Hills in California and First Bank of Idaho, FSB. The FDIC was able to find buyers for all these banks except First Bank of Beverly Hills. For the three banks, all deposits were transferred to the acquiring banks except for deposits from brokers. Brokered deposits will be held by the FDIC, and those insured deposits will be paid off when the insurance determination is complete. For the regular deposits, all deposits were transferred even those over the FDIC limits. So no money was lost. The only potential concern for depositors will be the decisions by the acquiring banks on CD interest rates.

For First Bank of Beverly Hills, the FDIC wasn't able to find a buyer. Therefore, the FDIC will be mailing checks for depositors' insured amounts which includes principal and interest earned through Friday, April 24, 2009. In this case, depositors over the FDIC limits may lose some money. Fortunately, it appears that the vast majority of the depositors had under the FDIC limits. Out of $1 billion in deposits, the FDIC estimates only $179,000 of uninsured deposits.

Here's a summary of the four failures:

26th Bank Failure of 2009 in Georgia
  • FDIC Press Release
  • Closed Bank: American Southern Bank
  • Location: Kennesaw, GA
  • Size: 1 office, $112 million assets, $104 million deposits
  • Possible Uninsured Deposits: All deposits transferred excluding those from brokers
  • Acquiring Bank: Bank of North Georgia
  • Estimated Cost to Deposit Insurance Fund: $42 million
  • Financial Ratings: 0 star at BauerFinancial, 1 star (lowest) at Bankrate.com
27th Bank Failure of 2009 in Michigan
  • FDIC Press Release
  • Closed Bank: Michigan Heritage Bank
  • Location: Farmington Hills, MI
  • Size: 3 offices, $185 million assets, $152 million deposits
  • Possible Uninsured Deposits: All deposits transferred excluding those from brokers
  • Acquiring Bank: Level One Bank, Farmington Hills, MI
  • Estimated Cost to Deposit Insurance Fund: $71 million
  • Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com
28th Bank Failure of 2009 in California
  • FDIC Press Release
  • Closed Bank: First Bank of Beverly Hills
  • Location: Calabasas, CA
  • Size: 1 office, $1.5 billion assets, $1 billion deposits
  • Possible Uninsured Deposits: $179,000
  • Acquiring Bank: None, FDIC mailing checks
  • Estimated Cost to Deposit Insurance Fund: $394 million
  • Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com
29th Bank Failure of 2009 in Idaho
  • FDIC Press Release
  • Closed Bank: First Bank of Idaho, FSB
  • Location: Ketchum, ID
  • Size: 7 offices in ID & WY, $489 million assets, $374 million deposits
  • Possible Uninsured Deposits: All deposits transferred excluding those from brokers
  • Acquiring Bank: U.S. Bank
  • Estimated Cost to Deposit Insurance Fund: $191 million
  • Financial Ratings: 2 star (problematic) at BauerFinancial, 1 star (lowest) at Bankrate.com
References:
Thanks to the readers who emailed me news of these closures.


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Comments
7 Comments.
Comment #1 by Anonymous posted on
Anonymous
I'll take a wild guess and suggest that the $179,000 of uninsured deposits was accrued interest that had taken some depositors' balances over the FDIC limits. Something to remember when determining your FDIC coverage - remember to account for the interest you'll earn.

1
Comment #2 by Joe (anonymous) posted on
Joe
Last year only 25 banks failed. It's an interesting counterpoint that already we've surpassed that amount and it's only April.

1
Comment #3 by Anonymous posted on
Anonymous
Actually, I expected to see a lot more bank failures by now. Not that I want to. Just expected to.

1
Comment #4 by Anonymous posted on
Anonymous
Has anyone ever determined what's going on in Georgia? The number of failed banks there seems unusual.

1
Comment #5 by Anonymous posted on
Anonymous
Eastern Financial Credit Union was taken over by regulators yesterday as well.

http://www.miamiherald.com/business/story/1016674.html

1
Comment #6 by carly (anonymous) posted on
carly
I went to the FDIC website and subscribed, and am receiving a monthly list of warnings sent to banks. I haven't been doing it long enough to see if the banks on the warnings are the same banks that later go out, but I think it's a great resource for your own bank research.

1
Comment #7 by calwatch (anonymous) posted on
calwatch
FBBH was given 10 days to raise capital, and was promptly closed at the end of the 10 days. So it should have been no surprise to depositors who read the paper. http://www.latimes.com/business/la-fi-beverly-bank17-2009apr17,0,6512268.story

1