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Regulators Close Four Banks & One Questionable Credit Union

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Regulators Close Four Banks & One Questionable Credit Union

Four small banks were closed by regulators this Friday, and on Monday the NCUA liquidated a small and bizarre credit union. That raises the number of 2011 bank failures to 55 and the number of 2011 credit union failures to 12. Last year at this time there had been 96 bank failures and 10 credit union liquidations.

Georgia added to its lead as the state with the most bank failures this year. Two of the four bank failures were in Georgia which brings the total number of 2011 Georgia bank failures to 16. The third bank failure today was in Florida. Last year Florida had the most bank failures, but this year, it's far behind Georgia with only 7 failures. The last closure today was in Arizona.

The FDIC arranged for other banks to assume all deposits of the four failed banks. The only exception was some brokered deposits.

The most interesting closure this week was the NCUA's liquidation of Vensure Federal Credit Union. The NCUA placed this credit union into conservatorship on April 15th, and soon after that news came out about its involvement with internet gambling. According to this Credit Union Journal:

Vensure is on pace to earn $4 million this year handling poker bets for its largest depositor Trinity Global Commerce, which processes bets for the two biggest online poker sites, PokerStars.com and FullTiltPoker.com. With no loans on its books, that amounts to 99% of its income.

The conservatorship came on the same day when the Justice Department shut down the three largest U.S. online poker companies. It appears it took almost three months for the NCUA to shut down the credit union due to the credit union's lawsuit against the NCUA. This Credit Union Times article has more detail on this court case.

This internet poker connection explains why the credit union had such high financial ratings.

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

52nd Bank Failure of 2011 (15th in Georgia)

  • FDIC Press Release
  • Closed Bank: High Trust Bank, Stockbridge, GA
  • Size: 2 branches, $192.5 million in assets, $189.5 million in deposits
  • Acquiring Bank: Ameris Bank, Moultrie, GA
  • Possible Uninsured Deposits: All deposit accounts, including brokered deposits, have been assumed by Ameris Bank
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $66.0 million
  • Enforcement Action: FDIC 11/20/09 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 1,020.35% at DepositAccounts.com (see financial rating note)

53rd Bank Failure of 2011 (16th in Georgia)

  • FDIC Press Release
  • Closed Bank: One Georgia Bank, Atlanta, GA
  • Size: 1 branch, $186.3 million in assets, $162.1 million in deposits
  • Acquiring Bank: Ameris Bank, Moultrie, GA
  • Possible Uninsured Deposits: All deposit accounts, excluding any Cede & Co. deposits, have been assumed by Ameris Bank
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $44.4 million
  • Enforcement Action: FDIC 3/19/10 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 353.19% at DepositAccounts.com (see financial rating note)

54th Bank Failure of 2011 (7th in Florida)

  • FDIC Press Release
  • Closed Bank: First Peoples Bank, Port Saint Lucie, FL
  • Size: 6 branches, $228.3 million in assets, $209.7 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 Q&A)
  • Estimated Cost to Deposit Insurance Fund: $7.4 million
  • Enforcement Action: FDIC 3/18/10 Consent Order, FDIC 1/28/11 PCA
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 177.04% at DepositAccounts.com (see financial rating note)

55th Bank Failure of 2011 (2nd in Arizona)

  • FDIC Press Release
  • Closed Bank: Summit Bank, Prescott, AZ
  • Size: 1 branch, $72.0 million in assets, $66.4 million in deposits
  • Acquiring Bank: The Foothills Bank, Yuma, AZ
  • Possible Uninsured Deposits: All deposit accounts, including brokered deposits, have been assumed by The Foothills Bank
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $11.3 million
  • Enforcement Action: FDIC 7/28/10 Consent Order, FDIC 2/10/11 PCA
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 209.00% at DepositAccounts.com (see financial rating note)

12th Credit Union Liquidation of 2011 (July 11)

  • NCUA Press Release
  • Liquidated CU: Vensure Federal Credit Union of Mesa, AZ
  • Conservatorship Date: April 15, 2011
  • Size: $8.1 million deposits and 140 members
  • Acquiring CU: None
  • Financial Ratings: 5 stars at Bankrate.com, ? stars at BauerFinancial, 5 stars at DepositAccounts.com and Texas Ratio of 0.00% (see financial ratings 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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Comment #1 by mbcbank (anonymous) posted on
mbcbank
Great information shared thnks

4