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Two Banks in Georgia and Florida Fail - Total for Year at 47

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One Georgia bank and one Florida bank failed this Friday which brings the total number of bank failures for the year to 47. As a comparison, last year at this time there had been 83 bank failures. Georgia continues to hold the lead as the state with the most 2011 bank failures. Its total is now 13. Florida is far behind with a total of 6 bank failures.

As has been common this year, the failed banks were small community banks. Both had assets well under $1 billion.

For both cases, the FDIC arranged for another bank to assume all deposits of the failed bank. So no regular deposits were lost even deposits over the FDIC limit. The only exception was brokered deposits. The bank that acquired the failed Florida bank didn't assume brokered deposits.

The Atlanta Journal Constitution has a good overview of the Georgia bank failure with reasons why it failed:

Like most of Georgia’s failed community banks, McIntosh State’s loan portfolio was heavily weighted in real estate, including loans for land purchase and development and commercial real estate. But the bank aggressively shrank its loan book as the real estate market soured.

I couldn't find any insightful article for the failed Florida bank. I also couldn't find any additional details on the banks' plans for existing CD rates. For both banks, the FDIC's FAQs stated the typical line:

Interest on deposits accrued through close of business the day the bank was closed will be paid at your same rate. 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 enter into a new deposit agreement.

With interest rate so low these days, it has been common for acquiring banks to lower rates on existing CDs of the failed banks.

Below is a summary of today's bank failures:

46th Bank Failure of 2011 (13th in Georgia)

  • FDIC Press Release
  • Closed Bank: McIntosh State Bank, Jackson, GA
  • Size: 4 branches, $339.9 million in assets, $324.4 million in deposits
  • Acquiring Bank: Hamilton State Bank, Hoschton, GA
  • Possible Uninsured Deposits: All deposit accounts, including brokered deposits, have been assumed by Hamilton State Bank
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC FAQs)
  • Estimated Cost to Deposit Insurance Fund: $80.0 million
  • Enforcement Action: FDIC 10/15/09 C&D Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 696.94% at DepositAccounts.com (see financial rating note)

47th Bank Failure of 2011 (6th in Florida)

  • FDIC Press Release
  • Closed Bank: First Commercial Bank of Tampa Bay, Tampa, FL
  • Size: 2 branches, $98.6 million in assets, $92.6 million in deposits
  • Acquiring Bank: Stonegate Bank, Fort Lauderdale, FL
  • Possible Uninsured Deposits: All deposit accounts, excluding the Cede & Co. deposits, have been assumed by Stonegate Bank
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC FAQs)
  • Estimated Cost to Deposit Insurance Fund: $28.5 million
  • Enforcement Action: FDIC 5/11/09 C&D Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 305.84% at DepositAccounts.com (see financial rating note)

Financial Ratings Notes: 0 star is lowest at BauerFinancial, 1 star is lowest at Bankrate.com & DepositAccounts.com, Texas Ratios over 100% is considered at risk. Ratings are based on March 2011 data except at Bankrate.com which are still based on December 2010 data.

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