Dedicated to Deposits: Deals, Data, and Discussion

Five Banks and One Credit Union Closed by Regulators

POSTED ON BY

Five Banks and One Credit Union Closed by Regulators

The FDIC had another busy Friday with 5 bank closures in the states of Georgia, Florida, Washington and Oregon. This brings the total number of bank failures in 2010 to 108. All of the banks were small with assets ranging from $66.1 million to $768.2 million.

Two banks failed in Florida which brings the total number of banks that have failed in Florida this year to 20. Florida now has a big lead as the state with the most 2010 bank failures. Illinois remains in second place with 12. Last year's leader, Georgia, is in third place with 11. Georgia had a total of 25 bank failures last year.

The FDIC was able to find buyers for all 5 failed banks, and all deposits (except some brokered deposits) were assumed by the acquiring banks including deposits above the FDIC limit.

Centennial Bank in Arkansas acquired both of the Florida banks that failed today. One thing to note is that Centennial admitted in its FAQs that existing CD rates from the failed banks "have changed to the current competitive rates offered by Centennial Bank." Customers should be allowed to make a penalty free early withdrawal. In today's low interest rate environment, this will be painful for depositors who had long-term CDs at these failed banks.

Earlier on Friday, the FDIC released its public June enforcement actions. These included 29 cease and desist consent orders and three prompt corrective actions. Two of the three prompt corrective actions (PCA) were banks that failed today. When banks receive a PCA directive, a failure is often very near.

In addition to the bank failures, one credit union was liquidated this week. Norbel Credit Union in Colorado became the 11th credit union to be liquidated in 2010. This evening, the NCUA published this press release announcing that Family First FCU in Utah has been placed into NCUA conservatorship. This isn't a failure, but these conservatorships often lead to liquidations.

Below is a summary of this week's bank and credit union failures:

104th Bank Failure of 2010 (11th in Georgia)

  • FDIC Press Release
  • Closed Bank: NorthWest Bank and Trust, Acworth, GA
  • Size: 2 branches, $167.7 million in assets, $159.4 million in deposits
  • Acquiring Bank: State Bank and Trust Company, Macon, GA
  • Possible Uninsured Deposits: All deposit accounts, excluding the Cede & Co deposits, have been assumed by State Bank and Trust Company
  • Rate Changes: Rates will be reviewed and may be lowered
  • Estimated Cost to Deposit Insurance Fund: $39.8 million
  • Enforcement Action: FDIC 3/3/10 Consent Order
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

105th Bank Failure of 2010 (19th in Florida)

  • FDIC Press Release, OTS Press Release
  • Closed Bank: Bayside Savings Bank, Port Saint Joe, FL
  • Size: 2 branches, $66.1 million in assets, $52.4 million in deposits
  • Acquiring Bank: Centennial Bank, Conway, AR
  • Possible Uninsured Deposits: All deposit accounts, including brokered deposits, have been assumed by Centennial Bank
  • Rate Changes: Rates on CDs have changed to the current competitive rates offered by Centennial Bank (per bank's FAQs)
  • Estimated Cost to Deposit Insurance Fund: $16.2 million
  • Enforcement Action: OTS 12/22/09 C&D Order, OTS 7/7/10 Prompt Corrective Action
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

106th Bank Failure of 2010 (20th in Florida)

  • FDIC Press Release
  • Closed Bank: Coastal Community Bank, Panama City Beach, FL
  • Size: 11 branches, $372.9 million in assets, $363.2 million in deposits
  • Acquiring Bank: Centennial Bank, Conway, AR
  • Possible Uninsured Deposits: All deposit accounts, including brokered deposits, have been assumed by Centennial Bank
  • Rate Changes: Rates on CDs have changed to the current competitive rates offered by Centennial Bank (per bank's FAQs)
  • Estimated Cost to Deposit Insurance Fund: $48.3 million
  • Enforcement Action: FDIC 4/21/09 C&D Order, FDIC 6/24/10 Prompt Corrective Action
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

107th Bank Failure of 2010 (8th in Washington)

  • FDIC Press Release
  • Closed Bank: The Cowlitz Bank, Longview, WA
  • Size: 9 branches, $529.3 million in assets, $513.9 million in deposits
  • Acquiring Bank: Heritage Bank, Olympia, WA
  • Possible Uninsured Deposits: All deposit accounts, excluding the Cede & Co deposits, have been assumed by Heritage Bank
  • Rate Changes: Rates will be reviewed and may be lowered
  • Estimated Cost to Deposit Insurance Fund: $68.9 million
  • Enforcement Action: FDIC 1/27/10 Consent Order, FDIC 6/15/10 Prompt Corrective Action
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

108th Bank Failure of 2010 (3rd in Oregon)

  • FDIC Press Release
  • Closed Bank: LibertyBank, Eugene, OR
  • Size: 15 branches, $768.2 million in assets, $718.5 million in deposits
  • Acquiring Bank: Home Federal Bank, Nampa, ID
  • Possible Uninsured Deposits: All deposit accounts, including brokered deposits, have been assumed by Home Federal Bank
  • Rate Changes: Rates will be reviewed and may be lowered
  • Estimated Cost to Deposit Insurance Fund: $115.3 million
  • Enforcement Action: FDIC 12/23/09 Consent Order, FDIC 5/14/10 Prompt Corrective Action
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial

11th Credit Union Liquidation of 2010 (closed on July 29)

  • NCUA Press Release
  • Liquidated CU: Norbel Credit Union,, Fort Collins, CO
  • Size: $120.0 million in assets and served 16,098 members
  • Acquiring CU: Security Service FCU, San Antonio, TX
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial

The above ratings are based on 3/31/2010 data.

References:

Edit 7/31/10: Added Bauer rating for Norbel.



Related Posts

Comments
3 Comments.
Comment #1 by Anonymous posted on
Anonymous
Norbel was ranked Zero Stars by Bauer Financial.

4
Comment #2 by KenBDG posted on
KenBDG
Thanks for the info on Norbel. BauerFinancial had already relabeled the credit union RSLVD (resolved/liquiated) when I checked last night. I've updated the post with this change.

2
Comment #3 by Jo (anonymous) posted on
Jo
Nowadays, one has to do their homework before deciding to open an account at a bank or a credit union. Obviously, assets and ratings are a good place to start. Customers/members who have banked there are another good indicator.

Hmmmm.....I guess if we relied solely on customer feedback about which direction banks were headed, Bank of America would have gone bust long ago?  *winks*

I'm wondering when the closures will eventually end....just some thoughts.

1