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A Florida Bank and an Arizona Bank Closed by Regulators

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A Florida Bank and an Arizona Bank Closed by Regulators

The first two bank failures of 2011 occurred today. Both were small banks. One was in Florida, and the other one was in Arizona. Florida ended 2010 with 29 bank failures which was the most of any state. So it should have been expected that the first bank failure of 2011 would be in Florida.

For both closures, the FDIC was able to find buyers to take over the failed banks. In both cases the acquiring banks have agreed to assume all deposits. The only exception is that certain brokered deposits of the closed Florida bank were not assumed. The FDIC stated in its Q&As for each bank that "No one lost any money on deposit as a result of the closure of this bank." This same thing happened for the vast majority of 2010 closures.

The failed Florida bank is First Commercial Bank of Florida. My first reports of this bank was in 2007 when they first launched their reward checking account. It was one of the few reward checking accounts with a large $250K balance cap.

How many banks will fail in 2011? At the end of my review of 2010 bank failures I discussed this question. It appears there should be fewer failures, so my guess is 130. There were 157 closures in 2010.

There were no credit union liquidations this week. There were 19 credit union liquidations in 2010.

Below is a summary of today's bank failures:

1st Bank Failure of 2011 (1st in Florida)

  • FDIC Press Release
  • Closed Bank: First Commercial Bank of Florida, Orlando, FL
  • Size: 9 branches, $598.5 million in assets, $529.6 million in deposits
  • Acquiring Bank: First Southern Bank Boca Raton, FL
  • Possible Uninsured Deposits: All deposit accounts, excluding the Cede & Co. deposits, have been assumed by First Southern Bank
  • Rate Changes: Current rates will be reviewed and may be lowered
  • Estimated Cost to Deposit Insurance Fund: $78.0 million
  • Enforcement Action: Federal Reserve 3/31/10 Written Agreement
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star at BauerFinancial, 1 out of 5 with a Texas Ratio of 265.60% at DepositAccounts.com

2nd Bank Failure of 2011 (1st in Arizona)

  • FDIC Press Release
  • Closed Bank: Legacy Bank, Scottsdale, AZ
  • Size: 2 branches, $150.6 million in assets, $125.9 million in deposits
  • Acquiring Bank: Enterprise Bank & TrustSt. Louis, MO
  • Possible Uninsured Deposits: All deposit accounts, including brokered deposits, have been assumed by Enterprise Bank & Trust
  • Rate Changes: Current rates will be reviewed and may be lowered
  • Estimated Cost to Deposit Insurance Fund: $27.9 million
  • Enforcement Action: FDIC 11/16/09 C&D Order, FDIC 5/24/10 PCA
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star at BauerFinancial, 0 out of 5 with a Texas Ratio of 306.50% at DepositAccounts.com

The above ratings are based on September 2010 data.

References:



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Comments
6 Comments.
Comment #1 by 51hh posted on
51hh
Ken:  First Southern Bank (FL) was given a 4* rating here at depositaccounts/com, I was wondering about the criteria used for such a high rating and whether there were factors we are missing from your rating system?  Thanks.

1
Comment #2 by KenBDG posted on
KenBDG
First Southern Bank was not the failed bank, but the bank that acquired the failed bank. The financial ratings of the failed banks were either 0/5 or 1/5 and both had Texas Ratios over 100%.

7
Comment #3 by 51hh posted on
51hh
Ken,

Sorry (my error), did not wake up yet:D

51hh

1
Comment #4 by Anonymous posted on
Anonymous
Does anyone know what percentage of banks and what percentage of credit unions failed in 2010?

I am glad that the dire predictions of 300 to 400 bank failures last year did not materialize. Let's hope the worst is behind us.

Thanks for the regular updates, Ken.

1
Comment #5 by Anonymous posted on
Anonymous
There are about 7,000 banks in the US. So roughly 2% failed last year.

5
Comment #6 by Anonymous posted on
Anonymous
Looks like there are about 11,000 credit unions in the country, according to America's Credit Unions. So that would mean about 0.2% failed/were liquidated last year.

1