Dedicated to Deposits: Deals, Data, and Discussion

7 Banks Fail Including UmbrellaBank's Parent and Imperial Capital

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It looks like the total number of bank failures for 2009 will be 140. Since today is the last non-holiday Friday for 2009, the FDIC will probably take a break for the rest of 2009. Seven banks failed today, and several were sizable banks. The FDIC wasn't able to find buyers for 3 of these banks. Consequently, only the insured deposits are being covered. The $250K basic coverage limit does seem to be keeping the uninsured deposits down. The FDIC estimates only $3.2 million out of about $960 million in total deposits of those 3 banks were uninsured.

Three of the closed banks were sizable and offered accounts nationwide on the internet. These include:
  • New South Federal Savings Bank, Irondale, AL (parent of UmbrellaBank)
  • Imperial Capital Bank, La Jolla, CA
  • First Federal Bank of California, Santa Monica, CA (operated FirstFedDirect.com)
The FDIC was able to find buyers for all of these three banks. It's interesting to see the buyer of First Federal Bank is OneWest Bank which was formerly IndyMac. For these three banks, all regular deposits are being transferred to the acquiring banks. There are no uninsured deposits that will be lost. The main concern will be what will happen to rates on existing CDs. OneWest Bank and the buyer of New South Federal have not reported their decision. The buyer of Imperial Capital, City National Bank, has already made its decision. It's lowering rates to its existing CD rates. Depositors will be allowed to make a penalty-free early withdrawal if the rates change.

Below is a summary of today's bank failures:

134th Bank Failure of 2009 (25th in GA)
  • FDIC Press Release
  • Closed Bank: RockBridge Commercial Bank, Atlanta, GA
  • Size: 1 branch, $294.0 million in assets, $291.7 million in deposits
  • Possible Uninsured Deposits: $2.1 million
  • Acquiring Bank: None
  • Rate Changes: All accounts being closed. Checks will be mailed.
  • Estimated Cost to Deposit Insurance Fund: $124.2 million
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial
135th Bank Failure of 2009 (14th in FL)
  • FDIC Press Release
  • Closed Bank: Peoples First Community Bank, Panama City, FL
  • Size: 29 branches, $1.8 billion in assets, $1.7 billion in deposits
  • Possible Uninsured Deposits: All deposits transferred except some brokered deposits
  • Acquiring Bank: Hancock Bank, Gulfport, MS
  • Rate Changes: Hancock Bank will review rates
  • Estimated Cost to Deposit Insurance Fund: $556.7 million
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial
136th Bank Failure of 2009 (4th in MI)
  • FDIC Press Release
  • Closed Bank: Citizens State Bank, New Baltimore, MI
  • Size: 7 branches, $168.6 million in assets, $157.1 million in deposits
  • Possible Uninsured Deposits: $803,000
  • Acquiring Bank: None (temporary bank formed to transition customers)
  • Rate Changes: CDs being closed. Checks will be mailed.
  • Estimated Cost to Deposit Insurance Fund: $76.6 million
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial
137th Bank Failure of 2009 (3rd in AL)
  • FDIC Press Release
  • Closed Bank: New South Federal Savings Bank, Irondale, AL (parent of UmbrellaBank)
  • Size: 1 branch, $1.5 billion in assets, $1.2 billion in deposits
  • Possible Uninsured Deposits: All deposits transferred
  • Acquiring Bank: Beal Bank, Plano, TX
  • Rate Changes: Beal Bank will review rates
  • Estimated Cost to Deposit Insurance Fund: $212.3 million
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial
138th Bank Failure of 2009 (21st in IL)
  • FDIC Press Release
  • Closed Bank: Independent Bankers' Bank, Springfield, IL
  • Size: 1 branch, $585.5 million in assets, $511.5 million in deposits
  • Possible Uninsured Deposits: $269,000
  • Acquiring Bank: bridge bank created by FDIC
  • Rate Changes: Independent Bankers' Bank did not take deposits directly from the general public
  • Estimated Cost to Deposit Insurance Fund: $68.4 million
  • Financial Ratings: 2 star (below peer group) at Bankrate.com, 0 star (lowest) at BauerFinancial
139th Bank Failure of 2009 (16th in CA)
  • FDIC Press Release
  • Closed Bank: Imperial Capital Bank, La Jolla, CA
  • Size: 9 branches, $4.0 billion in assets, $2.8 billion in deposits
  • Possible Uninsured Deposits: All deposits transferred, except some brokered deposits
  • Acquiring Bank: City National Bank, Los Angeles, CA
  • Rate Changes: CD rates changed to the rates that are paid on like term CDs for City National clients (CNB's FAQ)
  • Estimated Cost to Deposit Insurance Fund: $619.2 million
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial
140th Bank Failure of 2009 (17th in CA)
  • FDIC Press Release
  • Closed Bank: First Federal Bank of California, Santa Monica, CA
  • Size: 39 branches, $6.1 billion in assets, $4.5 billion in deposits
  • Possible Uninsured Deposits: All deposits transferred
  • Acquiring Bank: OneWest Bank, FSB, Pasadena, CA
  • Rate Changes: OneWest Bank, FSB will review rates
  • Estimated Cost to Deposit Insurance Fund: $146.3 million
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial
The above BauerFinancial ratings are based on 9/30/09 data and those from Bankrate are based on 6/30/09 data.

References:

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Comments
7 comments.
Comment #1 by Mike H. (anonymous) posted on
Mike H.
All these banks appeared in the most recent calculated risk list.

http://www.calculatedriskblog.com/2009/12/unofficial-problem-bank-list-increases.html

1
Comment #2 by Anonymous posted on
Anonymous
I have only a very small amount in Imperial Capital at the present time. It goes to show that higher rates do translate to higher risk. Even when banks are concerned. Sure, your deposits are insured (as long as your balance is within the maximum limits), but don't get too cozy with the FDIC.

1
Comment #3 by Anonymous posted on
Anonymous
I had an account with New South Federal back in 1986 when they offered a very high rate at that time. They have been near the top tier for a long time since. Too bad that they also got into the bad debt situation.

1
Comment #4 by Anonymous posted on
Anonymous
My CD at Umbrella Bank, a division of New South Federal, had it rate reduced substantially to 0.69% on Monday 12-21. You can remove the funds without penalty but must call for a fax number to fax your request in and have a reference number given to you by the CSR. They will mail you a check or you have the option of a wire transfer to another institution for a wire fee of $25.

1
Comment #5 by Banking Guy (anonymous) posted on
Banking Guy
Thanks for the update. Sorry to see Beal Bank cutting rates this much. What term was your CD?

1
Comment #6 by Anonymous posted on
Anonymous
City National just sent in the new rates for Imperial Capital CDs. Boy, are they slashed:

1 year = 0.85%
2 year = 1.15%
3 year = 1.5%
4 year = 2%
5+years = 2.15%

1
Comment #7 by calwatch (anonymous) posted on
calwatch
From the Fatwallet thread:
http://www.fatwallet.com/forums/finance/783099?lastpage=1

Money Market (APY)
<10K .65%
10K-24,999 .95%
25K-49,999 1.05%
>50K 1.10% (most recent Umbrella close was above 1.40%)

1