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Three Banks Failed Today Including TierOne Bank in Nebraska

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Three banks were closed today by regulators which brings the total number of bank failures this year to 81. The bank failures occurred in Mississippi, Illinois and Nebraska. It was the first bank failure in Mississippi since 2000. The Mississippi and Illinois banks were small, but the Nebraska bank, TierOne Bank, was sizable with 69 branches and $2.8 billion in assets.

Great Western Bank assumed all of TierOne's deposits. The Mississippi bank also had all of its deposits assumed by another bank. However, the Illinois bank, Arcola Homestead Savings Bank, had no buyer. So the FDIC will be mailing checks to depositors. The bank only had $18.1 million in deposits, and it appears no depositor had over the FDIC limit. So no one should be losing any of their deposits.

In addition to FDIC info, I also include safe and sound ratings from Bankrate and BauerFinancial. Ideally, the failed banks should have the lowest ratings. This has been typical, but there was an exception for the Mississippi bank. Bankrate.com had a 4-star rating (second highest) for this bank. BauerFinancial gave the bank its lowest rating of zero star. I also included our ratings at DepositAccounts.com which are based heavily on the Texas ratio. For all three failures, we had a low overall health score of 1 out of 5. I'm not sure why Bankrate had such a high rating. This is an example of why it's a good idea not to rely on just one rating service.

Another odd aspect of the Mississippi bank failure is that the bank had no public enforcement action. Credit to the Calculated Risk Blog for maintaining the unofficial list of problem banks which includes all banks with active public enforcement actions.

There were no credit union failures this week so the total number of credit union failures for the year remains at 8.

Below is a summary of today's bank failures:

79th Bank Failure of 2010 (1st in MS)

  • FDIC Press Release
  • Closed Bank: First National Bank, Rosedale, MS
  • Size: 1 branch, $60.4 million in assets, $63.5 million in deposits
  • Possible Uninsured Deposits: all deposit accounts have been transferred
  • Acquiring Bank: Jefferson Bank, Fayette, MS
  • Rate Changes: The Jefferson Bank will review rates
  • Estimated Cost to Deposit Insurance Fund: $12.6 million
  • Enforcement Action: None
  • Financial Ratings: 4 stars (sound) at Bankrate.com, 0 star (lowest) at BauerFinancial, 1 out of 5 at DepositAccounts.com

80th Bank Failure of 2010 (12th in IL)

  • FDIC Press Release
  • Closed Bank: Arcola Homestead Savings Bank, Arcola, IL
  • Size: 1 branch, $17.0 million in assets, $18.1 million in deposits
  • Possible Uninsured Deposits: "there did not appear to be any uninsured funds"
  • Acquiring Bank: None
  • Rate Changes: All acounts being closed. Checks will be mailed.
  • Estimated Cost to Deposit Insurance Fund: $3.2 million
  • Enforcement Action: 10/14/09 Federal Reserve written agreement 4/22/10 FDIC Consent Order
  • Financial Ratings: 2 stars (below peer group) at Bankrate.com, 0 star (lowest) at BauerFinancial, 1 out of 5 at DepositAccounts.com

81st Bank Failure of 2010 (1st in NE)

  • FDIC Press Release
  • Closed Bank: TierOne Bank, Lincoln, NE
  • Size: 69 branches, $2.8 billion in assets, $2.2 billion in deposits
  • Possible Uninsured Deposits: all deposit accounts have been transferred
  • Acquiring Bank: Great Western Bank, Sioux Falls, SD
  • Rate Changes: Great Western Bank will review rates
  • Estimated Cost to Deposit Insurance Fund: $297.8 million
  • Enforcement Action: 1/15/09 OTS Supervisory Agreement
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial, 1 out of 5 at DepositAccounts.com

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