Dedicated to Deposits: Deals, Data, and Discussion

Four Bank Fail Including La Jolla Bank, FSB in California

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La Jolla Bank in California was the largest bank to fail today. They had offered accounts nationwide, and I've long included them in my weekly rate summaries. It was interesting to see OneWest Bank assume all deposits of La Jolla. In December OneWest assumed all deposits from the 39-branch First Federal Bank of California.

The other three banks that failed were much smaller with two of them being tiny. One of these tiny banks was The La Coste National Bank based in Texas, and there is something very interesting to note about this failure. Before the failure, BauerFinancial had given the bank a 5-star rating (highest) and Bankrate.com had given it a 3-star rating (performing). These are the highest ratings I can remember for a failed bank. The problem could be due to the fact that the ratings are based on 9/30/09 data. The bank's financial health may have started to nosedive soon after this date.

For all four closures, the FDIC was able to find buyers which assumed all deposits. The main concern will be for those who had CDs with one of these banks. The assuming banks are free to change rates on existing CDs.

Below is a summary of today's bank failures:

17th Bank Failure of 2010 (3rd in FL)

  • FDIC Press Release
  • Closed Bank: Marco Community Bank, Marco Island, FL
  • Size: 1 branch, $119.6 in assets, $117.1 million in deposits
  • Possible Uninsured Deposits: all deposit accounts, excluding the Cede & Co. brokered deposits have been transferred
  • Acquiring Bank: Mutual of Omaha Bank, Omaha, NE
  • Rate Changes: Mutual of Omaha Bank will review rates
  • Estimated Cost to Deposit Insurance Fund: $38.1 million
  • Enforcement Action: Federal Reserve 8/14/07 Written Agreement, 2/2/10 Prompt Corrective Action
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

18th Bank Failure of 2010 (1st in TX)

  • FDIC Press Release, OCC Press Release
  • Closed Bank: The La Coste National Bank, La Coste, TX
  • Size: 1 branch, $53.9 million in assets, $49.3 million in deposits
  • Possible Uninsured Deposits: All deposits transferred
  • Acquiring Bank: Community National Bank, Hondo, TX
  • Rate Changes: Community National Bank will review rates
  • Estimated Cost to Deposit Insurance Fund: $3.7 million
  • Enforcement Action: None
  • Financial Ratings: 3 star (performing) at Bankrate.com, 5 stars (superior) at BauerFinancial

19th Bank Failure of 2010 (2nd in IL)

  • FDIC Press Release
  • Closed Bank: George Washington Savings Bank, Orland Park, IL
  • Size: 4 branches, $412.8 million in assets, $397.0 million in deposits
  • Possible Uninsured Deposits: All deposits transferred
  • Acquiring Bank: FirstMerit Bank, N.A., Akron, OH
  • Rate Changes: FirstMerit Bank, N.A. will review rates
  • Estimated Cost to Deposit Insurance Fund: $141.4 million
  • Enforcement Action: None
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

20th Bank Failure of 2010 (2nd in CA)

  • FDIC Press Release, OTS Press Release
  • Closed Bank: La Jolla Bank, FSB, La Jolla, CA
  • Size: 10 branches, $3.6 billion in assets, $2.8 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: $882.3 million
  • Enforcement Action: OTS 9/9/09 Cease & Desist order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

The above BauerFinancial and Bankrate ratings are based on 9/30/09 data.

References:



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Comments
3 Comments.
Comment #1 by Anonymous posted on
Anonymous
How did a bank with such high rating in two places fail...can we rely on these these ratings???

1
Comment #2 by Anonymous posted on
Anonymous
I always come to your blog to find out the latest bank failures.  Thanks for providing the information.  I rarely see you comment on credit union failures in your weekly post on this topic.  Can you include a statement in the future that no credit unions failed this week?  Thanks again for all.

1
Comment #3 by Anonymous posted on
Anonymous
I agree with you wholeheartedly, Ken. The lack of up-to-data data is worrying.  In these perilous times, last fall was an eternity ago.  I wish there were a free rating service that followed events in a far more timely manner.

1