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One Florida Bank Fails and Two Credit Unions Placed into Conservatorship


Only one small Florida bank failed for this first Friday of May. That brings the total number of bank failures for the year to 40 with 5 in Florida. At this time last year there had been 68 bank failures with 10 in Florida.

The failed bank was Coastal Bank of Cocoa Beach, Florida. The FDIC arranged for Premier American Bank, N.A. to acquire Coastal Bank. Premier American is the same bank that acquired last week's two failed Florida banks. Just like last week, Premier American Bank assumed all deposits except some brokered deposits. As has been common, no one with regular deposits lost any money even those who had over the FDIC limit.

Premier American Bank did not mention what would happen to the rates on Coastal Bank CDs. The FDIC has its typical note in the Q&As:

Current rates will be reviewed by the new bank and may be lowered; however, you may withdraw funds from any transferred account without early withdrawal penalty until you renew your Certificate of Deposit.

Credit Unions

There were no credit union liquidations this week, but the NCUA did place two tiny credit unions into conservatorship on Wednesday. This basically involves the NCUA taking over management of the credit unions with the intent on resolving issues affecting the credit union's safety and soundness. Both credit unions were tiny with under $10 million in assets.

Coastal Bank had the lowest financial health ratings scores that were possible. However, the two credit unions had higher health scores. In fact one of these two, Hmong American Federal Credit Union, had high health scores at and at The reason may be due to the tiny size of the credit union. These kinds of credit unions may have more management issues which are harder to capture from the financial data.

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

40th Bank Failure of 2011 (5th in Florida)

  • FDIC Press Release
  • Closed Bank: Coastal Bank, Cocoa Beach, FL
  • Size: 2 branches, $129.4 million in assets, $123.9 million in deposits
  • Acquiring Bank: Premier American Bank, N.A., Miami, FL
  • Possible Uninsured Deposits: All deposit accounts, excluding the Cede & Co. deposits, have been assumed by Premier American Bank, N.A.
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC)
  • Estimated Cost to Deposit Insurance Fund: $13.4 million
  • Enforcement Action: OTS 12/31/09 Supervisory Agreement, OTS 4/21/11 PCA
  • Financial Ratings: 1 star at, 0 star at BauerFinancial, 1 star & Texas Ratio of 225.78% at (see financial rating note)

4th Credit Union Conservatorship of 2011 (May 4th)

  • NCUA Press Release
  • CU placed into conservatorship: Valued Members Federal Credit Union of Jackson, MS
  • Size: $9 million in assets and served 2,030 members
  • Financial Ratings: 2 stars at, 1 star at BauerFinancial, 2 stars & Texas Ratio of 39.13% at (see financial rating note)

5th Credit Union Conservatorship of 2011 (May 4th)

  • NCUA Press Release
  • CU placed into conservatorship: Hmong American Federal Credit Union of St. Paul, MN
  • Size: $2.7 million in assets and 716 members
  • Financial Ratings: 4 stars at, 2 stars at BauerFinancial, 5 stars & Texas Ratio of 1.77% at (see financial rating note)

Financial Ratings Notes: 0 star is lowest at BauerFinancial, 1 star is lowest at &, Texas Ratios over 100% is considered at risk. Ratings are based on December 2010 data.


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