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Four Banks Closed by Regulators with No Buyer for a Colorado Bank

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Regulators closed four banks today in Oklahoma, Wisconsin, Colorado and New Mexico. With these four failures, the total number of bank failures for 2011 is now at 11. That compares to 15 banks that had failed by this time last year.

Just like last week, one of the four banks that failed did not have a buyer. That was FirsTier Bank in Colorado, and it will be shut down by the FDIC. The FDIC will be keeping it open until February 28th as a temporary bank to allow depositors access to their insured deposits so they will have time to open accounts at other banks. This is only for liquid accounts. For CDs and IRAs, the FDIC will be mailing checks. Depositors of FirsTier Bank who had over the FDIC coverage limits will likely lose their uninsured deposits.

For the other three bank failures, the FDIC was able to find buyers which agreed to assume all deposits except some brokered deposits. The main concern for depositors will be what will happen to their existing CDs from the failed banks. The acquiring banks have the right to lower the rates. If rates are changed, the depositors will be allowed to make a penalty free withdrawal, but that doesn't help much in today's low interest rate environment.

The largest bank that failed today was First Community Bank in Taos, New Mexico. It had 38 branches and $2.31 billion in assets. The FDIC arranged for US Bank to assume all deposits. This gives US Bank its first New Mexico branches. Before this acquisition, US Bank had 3095 domestic branches according to September 2010 FDIC data.

Three out of the four banks had weak health ratings. That was not the case for The First State Bank in Camargo, OK. At DepositAccounts.com we had given the bank an overall health score of 4 out of 5. Bankrate.com also gave the bank a high score of 4 stars (out of 5). BauerFinancial was the winner in its ratings giving the bank only 2 out of 5 stars.

One reason for the high scores may be due to the ratings being based on September 30th data. A rapid decline in health was missed. The rapid health decline would also explain the FDIC consent order that wasn't issued until December 21st. This consent order just became public today when the FDIC released its December enforcement actions. The FDIC won't be coming out with December 31st data until late February.

There have been no credit union liquidations this week. So far this year there haven't been any liquidations. There were 19 credit union liquidations in 2010.

Below is a summary of today's bank failures:

8th Bank Failure of 2011 (1st Oklahoma)

  • FDIC Press Release
  • Closed Bank: The First State Bank, Camargo, OK
  • Size: 1 branch, $43.5 million in assets, $40.3 million in deposits
  • Acquiring Bank: Bank 7, Oklahoma City, OK
  • Possible Uninsured Deposits: All deposit accounts, excluding Cede & Co. deposits, have been assumed by Bank 7
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered
  • Estimated Cost to Deposit Insurance Fund: $20.1 million
  • Enforcement Action: FDIC 12/21/10 Consent Order (only made public on 1/28/11)
  • Financial Ratings: 4 stars at Bankrate.com, 2 stars at BauerFinancial, 4 out of 5 with a Texas Ratio of 4.15% at DepositAccounts.com

9th Bank Failure of 2011 (1st in Wisconsin)

  • FDIC Press Release
  • Closed Bank: Evergreen State Bank, Stoughton, WI
  • Size: 4 branches, $246.5 million in assets, $195.2 million in deposits
  • Acquiring Bank: McFarland State Bank, McFarland, WI
  • Possible Uninsured Deposits: All deposit accounts, excluding the Cede & Co. deposits, has been assumed by McFarland State Bank
  • Rate Changes: McFarland State Bank may change interest rates
  • Estimated Cost to Deposit Insurance Fund: $22.8 million
  • Enforcement Action: FDIC 1/25/10 Consent Order, FDIC 12/10/10 PCA (PCA publicly released on 1/28/11)
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star at BauerFinancial, 0 out of 5 with a Texas Ratio of 194.45% at DepositAccounts.com

10th Bank Failure of 2011 (2nd in Colorado)

  • FDIC Press Release
  • Closed Bank: FirsTier Bank, Louisville, CO
  • Size: 9 branches, $781.5 million in assets, $722.8 million in deposits
  • Acquiring Bank: None
  • Possible Uninsured Deposits: The amount of deposits exceeding the insurance limits was undetermined
  • Rate Changes: N/A
  • Estimated Cost to Deposit Insurance Fund: $242.6 million
  • Enforcement Action: FDIC 1/22/10 Consent Order, FDIC 4/21/10 PCA
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star at BauerFinancial, 1 out of 5 with a Texas Ratio of 403.98% at DepositAccounts.com

11th Bank Failure of 2011 (1st in New Mexico)

  • FDIC Press Release
  • Closed Bank: First Community Bank, Taos, NM
  • Size: 38 branches, $2.31 billion in assets, $1.94 billion in deposits
  • Acquiring Bank: US Bank, N.A., Minneapolis, MN
  • Possible Uninsured Deposits: All deposit accounts, excluding the Cede & Co. deposits, have been assumed by U.S.Bank, N.A.
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered
  • Estimated Cost to Deposit Insurance Fund: $260.0 million
  • Enforcement Action: Federal Reserve 7/2/09 Written Agreement
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star at BauerFinancial, 1 out of 5 with a Texas Ratio of 183.66% at DepositAccounts.com

The above ratings are based on September 2010 data.

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