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Regulators Close Three Banks and One Credit Union

POSTED ON BY

Regulators closed three banks today in Georgia and Illinois and one credit union in California. That brings the total number of 2011 bank failures to 14. The credit union liquidation is the first for 2011.

All four institutions were small. The largest, American Trust Bank in Georgia, had assets of $238.2 million.

The FDIC arranged for all three banks to be acquired by other banks. All deposits were assumed by these new banks, but there was one exception. For one of the Georgia banks, certain brokered and internet deposits were not assumed. According to the FDIC, internet deposit customers will receive a check from the FDIC for the amount of their funds

There was another case in which internet deposits were treated differently. In Illinois, the acquiring bank, Northbrook Bank & Trust, decided to adjust rates on internet CDs, but to leave the rates for local personal and IRA CDs unchanged. This was described in Northbrook's FAQs.

We started to see out-of-state deposits being treated differently late last year. In two cases these deposits were not assumed by the acquiring banks. Instead the FDIC mailed checks. These are clear signs that banks are not placing as much value on out-of-state depositors as compared to local depositors. They probably feel local depositors are more likely to use the bank for other services like checking accounts and loans.

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

12th Bank Failure of 2011 (3rd in Georgia)

  • FDIC Press Release
  • Closed Bank: American Trust Bank, Roswell, GA
  • Size: 3 branches, $238.2 million in assets, $222.2 million in deposits
  • Acquiring Bank: Renasant Bank, Tupelo, MS
  • Possible Uninsured Deposits: All deposit accounts, including brokered deposits, have been assumed by Renasant Bank
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered
  • Estimated Cost to Deposit Insurance Fund: $71.5 million
  • Enforcement Action: FDIC 10/9/09 C&D Order
  • Financial Ratings: 1 star at Bankrate.com, 0 stars at BauerFinancial, 0 out of 5 with a Texas Ratio of 571.69% at DepositAccounts.com

13th Bank Failure of 2011 (4th in Georgia)

  • FDIC Press Release
  • Closed Bank: North Georgia Bank, Watkinsville, GA
  • Size: 2 branches, $153.2 million in assets, $139.7 million in deposits
  • Acquiring Bank: BankSouth, Greensboro, GA
  • Possible Uninsured Deposits: All of the deposits, except certain brokered and internet deposits, were assumed by BankSouth
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered
  • Estimated Cost to Deposit Insurance Fund: $35.2 million
  • Enforcement Action: FDIC Written Agreement
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star at BauerFinancial, 1 out of 5 with a Texas Ratio of 732.80% at DepositAccounts.com

14th Bank Failure of 2011 (1st in Illinois)

  • FDIC Press Release
  • Closed Bank: Community First Bank – Chicago, Chicago, IL
  • Size: 1 branch, $51.1 million in assets, $49.5 million in deposits
  • Acquiring Bank: Northbrook Bank and Trust Company, Northbrook, IL
  • Possible Uninsured Deposits: All deposit accounts, including any brokered deposits, have been assumed by Northbrook Bank & Trust Company
  • Rate Changes: No changes for local personal and IRA CDs. Internet CDs will be adjusted (bank's FAQs)
  • Estimated Cost to Deposit Insurance Fund: $11.7 million
  • Enforcement Action: Federal Reserve 2/3/10 Written Agreement
  • Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star at BauerFinancial, 1 out of 5 with a Texas Ratio of 206.85% at DepositAccounts.com

1st Credit Union Liquidation of 2011

  • NCUA Press Release
  • Liquidated CU: Oakland Municipal Credit Union of Oakland
  • Size: $88 million in assets and served 7,800 members
  • Acquiring CU: Western Federal Credit Union of Manhattan Beach, CA
  • Financial Ratings: 2 out of 5 with a Texas Ratio of 92.05% at DepositAccounts.com, 1 star at Bankrate.com, 0 star at BauerFinancial

The above ratings are based on September 2010 data.

References:


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Comments
5 comments.


Comment #2 by ChrisB (anonymous) posted on
ChrisB
Can anyone give me an address on this "Community First Bank in Chicago"  I have a bank in Chicago with a similar name and want to know if this is it.  **** shame either way.

1
Comment #3 by KenBDG posted on
KenBDG
@ChrisB, Here's the address: 7555 North Western Avenue, Chicago, IL 60645

2