Dedicated to Deposits: Deals, Data, and Discussion

Seven Banks Failed Including Frontier Bank in Washington State

POSTED ON BY

Seven banks failed on Friday which brings the yearly total to 64. Three sizable banks were closed in Puerto Rico. This is the first time that banks have failed in Puerto Rico since at least 2001 when the FDIC started recording bank failures on the web. These 3 Puerto Rican bank failures cost the FDIC Deposit Insurance Fund (DIF) a total of $5.28 billion.

For the other 4 bank failures, two were in Missouri, one in Michigan, and one in Washington State. The largest of these banks was Frontier Bank in Washington State which had $3.50 billion in assets. Frontier's failure was also costly to the DIF with a cost of $1.37 billion. The total estimated cost to the DIF of Friday's 7 bank failures was $7.33 billion.

The FDIC was able to find buyers for all 7 of the failed banks. Banco Popular assumed all deposits of the largest bank failure in Puerto Rico. In Washington State, Union Bank assumed all deposits of Frontier Bank.

As is typical, the FDIC didn't give any indication if the acquiring banks were going to honor rates on existing CDs. If you learn what any of these banks decide, please leave a comment.

Earlier today, the FDIC made public March enforcement actions. These included 42 cease and desist consent orders and 8 prompt corrective actions. It's interesting to note that one of the 8 prompt corrective actions was against Frontier Bank. Other banks that received PCAs include City Bank in WA, Sun West Bank in Las Vegas and Bank of Florida.

Below is a summary of today's bank failures:

58th Bank Failure of 2010 (1st in PR)

  • FDIC Press Release
  • Closed Bank: Eurobank, San Juan, PR
  • Size: 22 branches, $2.56 billion in assets, $1.97 billion in deposits
  • Possible Uninsured Deposits: all deposits have been transferred
  • Acquiring Bank: Oriental Bank and Trust, San Juan, Puerto Rico
  • Rate Changes: Current rates will be reviewed by the acquiring institution and may be lowered
  • Estimated Cost to Deposit Insurance Fund: $743.9 million
  • Enforcement Action: FDIC 10/9/09 Cease & Desist Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

59th Bank Failure of 2010 (2nd in PR)

  • FDIC Press Release
  • Closed Bank: R-G Premier Bank of Puerto Rico, Hato Rey, PR
  • Size: 29 branches, $5.92 billion in assets, $4.25 billion in deposits
  • Possible Uninsured Deposits: All deposits transferred
  • Acquiring Bank: Scotiabank de Puerto Rico, San Juan, PR
  • Rate Changes: Current rates will be reviewed by the acquiring institution and may be lowered
  • Estimated Cost to Deposit Insurance Fund: $1.23 billion
  • Enforcement Action: FDIC 10/23/09 Cease & Desist Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

60th Bank Failure of 2010 (3rd in PR)

  • FDIC Press Release
  • Closed Bank: Westernbank Puerto Rico, Mayaguez, PR
  • Size: 46 branches, $11.94 billion in assets, $8.62 billion in deposits
  • Possible Uninsured Deposits: All deposits transferred
  • Acquiring Bank: Banco Popular de Puerto Rico, San Juan, PR
  • Rate Changes: Current rates will be reviewed by the acquiring institution and may be lowered
  • Estimated Cost to Deposit Insurance Fund: $3.31 billion
  • Enforcement Action: FDIC 5/22/09 Cease & Desist Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

61st Bank Failure of 2010 (2nd in MI)

  • FDIC Press Release
  • Closed Bank: CF Bancorp, Port Huron, MI
  • Size: 22 branches, $1.65 billion in assets, $1.43 billion in deposits
  • Possible Uninsured Deposits: all deposit accounts transferred, excluding the Cede & Co. brokered deposits
  • Acquiring Bank: First Michigan Bank, Troy, MI
  • Rate Changes: First Michigan Bank will review rates
  • Estimated Cost to Deposit Insurance Fund: $615.3 million
  • Enforcement Action: FDIC 2/24/10 Consent Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

62nd Bank Failure of 2010 (2nd in MO)

  • FDIC Press Release
  • Closed Bank: Champion Bank, Creve Coeur, MO
  • Size: 1 branch, $187.3 million in assets, $153.8 million in deposits
  • Possible Uninsured Deposits: all deposit accounts transferred, excluding the Cede & Co. brokered deposits
  • Acquiring Bank: BankLiberty, Liberty, MO
  • Rate Changes: BankLiberty will review rates
  • Estimated Cost to Deposit Insurance Fund: $52.7 million
  • Enforcement Action: No public actions
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

63rd Bank Failure of 2010 (3rd in MO)

  • FDIC Press Release
  • Closed Bank: BC National Banks, Butler, MO
  • Size: 4 branches, $67.2 million in assets, $54.9 million in deposits
  • Possible Uninsured Deposits: all deposit accounts transferred
  • Acquiring Bank: Community First Bank, Butler, MO
  • Rate Changes: Community First Bank will review rates
  • Estimated Cost to Deposit Insurance Fund: $11.4 million
  • Enforcement Action: OCC 2/3/09 Consent Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

64th Bank Failure of 2010 (6th in WA)

  • FDIC Press Release
  • Closed Bank: Frontier Bank, Everett, WA
  • Size: 51 branches, $3.50 billion in assets, $3.13 billion in deposits
  • Possible Uninsured Deposits: all deposit accounts transferred, excluding the Cede & Co. brokered deposits
  • Acquiring Bank: Union Bank, N.A., San Francisco, CA
  • Rate Changes: Union Bank will review rates
  • Estimated Cost to Deposit Insurance Fund: $1.37 billion
  • Enforcement Action: FDIC 3/20/09 Cease & Desist Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

6th Credit Union Liquidation of 2010

  • NCUA Press Release
  • Liquidated CU: Tracy Federal Credit Union, Tracy, CA
  • Size: $25.4 million in assets and served 5,973 members
  • Acquiring CU: Valley First Credit Union, Modesto, CA
  • Financial Ratings: 2 stars (below peer group) at Bankrate.com, ? star at BauerFinancial

The above Bankrate ratings are based on 9/30/09 data. BauerFinancial Ratings are based on 12/31/09 data.

References:


Related Posts

Comments
4 comments.
Comment #1 by Anonymous posted on
Anonymous
How deep is FDIC's pocket? I can't believe they allowed Puerto Rico's banks got so out of control that one bank's claim can cost $3.31 billion dollars.

2
Comment #2 by Anonymous posted on
Anonymous
maybe the time has come for pr to become their own country 5 thumbs up

0
Comment #3 by CRL (anonymous) posted on
CRL
Does anyone know how Union Bank treated the CD account holders of the banks whose assest they purchased on April 16, 2010? i.e, did they honor the existing CD interest rates or did they reduced they way down? Any information would be appreciated.

1