Dedicated to Deposits: Deals, Data, and Discussion

Three Banks Closed by Regulators in FL, AZ and KS

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The number of bank failures has reached 133 for 2009. It looks like we may not reach 140 since next Friday would be the last non-holiday Friday of 2009. All three of today's failed banks were small with the largest one having assets of $511 million. The FDIC was able to find buyers for all three of these banks, and all deposits were assumed by the buyers including deposits above the FDIC limit.

The main concern for depositors is how this will change their CD rates. The assuming banks will be allowed to change the CD rates. Depositors will have the option for a penalty-free early withdrawal, but that's not much comfort in today's low-rate environment.

One of the banks has already announced their decision on CD rates. Arvest Bank which took over SolutionsBank in Kansas stated in their FAQ for SolutionsBank customers that "Your rates on your Certificates of Deposit have changed to the current competitive rates for Arvest Bank as of Friday, December 11, 2009."

I reported on SolutionsBank a couple times in the last year. Last March they were offering a 3% 18-month CD. Arvest Bank's CD rates are much lower so anyone with this 18-month CD will likely be disappointed.

SolutionsBank had been offering a reward checking account. It started out with a 5.03% APY for balances up to $50K. At first the rate dropped gradually until May 2009 when the rate plummeted from 4.13% to 1.71%. It's interesting that this was a couple of months after the bank received a public enforcement action.

Another interesting note regarding SolutionsBank is that it had decent ratings for safety and soundness when I posted on the bank in March 2009 with 3 stars at both BauerFinancial and Bankrate. At the time of the bank's closure, the bank had the lowest ratings at both BauerFinacial and Bankrate.

Below is a summary of today's bank failures:

131st Bank Failure of 2009 (13th in FL)
  • FDIC Press Release
  • Closed Bank: Republic Federal Bank, N.A.
  • Size: 4 branches, $433.0 million in assets, $352.7 million in deposits
  • Possible Uninsured Deposits: All deposits transferred, except some brokered deposits
  • Acquiring Bank: 1st United Bank, Boca Raton, FL
  • Rate Changes: 1st United Bank will review rates
  • Estimated Cost to Deposit Insurance Fund: $122.6 million
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial
132nd Bank Failure of 2009 (4th in AZ)
  • FDIC Press Release
  • Closed Bank: Valley Capital Bank, N.A., Mesa, AZ
  • Size: 1 branch, $40.3 million in assets, $41.3 million in deposits
  • Possible Uninsured Deposits: All deposits transferred
  • Acquiring Bank: Enterprise Bank & Trust, Clayton, MO
  • Rate Changes: Enterprise Bank & Trust will review rates
  • Estimated Cost to Deposit Insurance Fund: $7.4 million
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial
133rd Bank Failure of 2009 (3rd in KS)
  • FDIC Press Release
  • Closed Bank: SolutionsBank, Overland Park, KS
  • Size: 6 branches, $511.1 million in assets, $421.3 million in deposits
  • Possible Uninsured Deposits: All deposits transferred, excluding some brokered deposits
  • Acquiring Bank: Arvest Bank, Fayetteville, AR
  • Rate Changes: CD rates have changed to the current rates for Arvest Bank as of December 11, 2009 (Arvest's FAQ)
  • Estimated Cost to Deposit Insurance Fund: $122.1 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.

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