Dedicated to Deposits: Deals, Data, and Discussion

Three Banks Fail Today - 30th, 31st & 32nd Failures for 2009

POSTED ON BY

This was another busy Friday for the FDIC. Three banks were closed today: Silverton Bank, N.A. in Georgia, Citizens Community Bank in New Jersey and America West Bank in Utah. Silverton Bank wasn't a typical bank. It was a commercial bank that only served other banks. It did not take deposits directly from the general public. The FDIC has created a bridge bank that it'll control for the next 60 to 90 days allowing for it to be liquidated in an orderly fashion.

The other two banks were the more typical type of banks. For both of these closures, the FDIC was able to find another bank to assume all deposits. So no depositors will lose any money. The only potential concern for depositors will be the decisions by the acquiring banks on the CD interest rates. They're free to lower the CD rates starting May 2nd. However, depositors are free to withdraw funds without an early withdrawal penalty.

One interesting note about America West Bank in Utah is that it was one of the few Utah banks that offered a reward checking account. It'll be interesting to know how the new bank will handle the interest rates. Will they pay the reward rates for depositors who qualified during the previous month or just the base rate.

Here's a summary of the three failures:

30th Bank Failure of 2009 in Georgia
  • FDIC Press Release
  • Closed Bank: Silverton Bank, National Association
  • Location: Atlanta, GA
  • Size: 6 regional offices, $4.1 billion in assets, $3.3 billion deposits
  • Possible Uninsured Deposits: All deposits expected to be within the FDIC's insurance limits
  • Acquiring Bank: None
  • Estimated Cost to Deposit Insurance Fund: $1.3 billion
  • Financial Ratings: ? star at BauerFinancial, 1 star (lowest) at Bankrate.com
31st Bank Failure of 2009 in New Jersey
  • FDIC Press Release
  • Closed Bank: Citizens Community Bank
  • Location: Ridgewood, NJ
  • Size: 1 office, $45.1 million assets, $43.7 million deposits
  • Possible Uninsured Deposits: All deposits transferred, including brokered deposits
  • Acquiring Bank: North Jersey Community Bank, Englewood Cliffs, NJ
  • Estimated Cost to Deposit Insurance Fund: $18.1 million
  • Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com
32nd Bank Failure of 2009 in Utah
  • FDIC Press Release
  • Closed Bank: America West Bank
  • Location: Layton, UT
  • Size: 3 offices, $299.4 million assets, $284.1 million deposits
  • Possible Uninsured Deposits: All deposits transferred, including brokered deposits
  • Acquiring Bank: Cache Valley Bank, Logan, UT
  • Estimated Cost to Deposit Insurance Fund: $119.4 million
  • Financial Ratings: 0 star (lowest) at BauerFinancial, 1 star (lowest) at Bankrate.com
References:
Thanks to the readers who emailed me news of these closures.

Related Posts

Comments
6 comments.
Comment #1 by Anonymous posted on
Anonymous
Is there a way to find a list of banks which are under investigation by FDIC ? It seems like under investigation banks are more likely to fail than others.

1
Comment #2 by Anonymous posted on
Anonymous
To find if a certain bank is strong go to google and put in research your bank. You will get a bankrate.com site. Look at your bank or credit union. You can get the stars, the financial page etc.
You cannot find the banks under investigation. The stress test should be out Thursday for the largest 19 banks.

1
Comment #4 by Anonymous posted on
Anonymous
Enforcement actions are released to the public via the above FDIC link once a month on a one-month delay basis.

My personal observation has been that most banks receive some type of enforcement action months before they are seized. Generally most actions are to raise/maintain certain capital levels and to write-off bad loans as identified on FDIC/OTS/OCC examinations (regulatory audits).

OC Steve

1
Comment #5 by Anonymous posted on
Anonymous
What is going on in GA? They have many if not the most bank failures in the last 2 years.

1
Comment #6 by Anonymous posted on
Anonymous
FYI - Darby Direct's website now says that their 3.0% online savings account is for Georgia residents only.

1