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One Kansas Bank and One ASI-Only California Credit Union Fail

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One Kansas Bank and One ASI-Only California Credit Union Fail

Just one Kansas bank failed today which brings the total for the year to 64. It was the first bank failure in Kansas this year. At this time last year there had been 110 bank failures. So the pace of failures this year continues to be well below the 2010 pace.

It was the typical bank failure with another bank assuming all regular deposits. The acquiring bank doesn't mention what it may do to existing CD rates. According to the FDIC FAQ, current rates will be reviewed by the new bank and may be lowered. If the bank does lower the CD rates, the customers will be allowed to make a penalty-free early withdrawal.

There was also a credit union failure today, but the NCUA wasn't involved. It was a small California credit union that only had private deposit insurance via ASI. There hasn't been many ASI-only credit union liquidations. The last one that I remember was in October 2009. The credit union was closed by the California Department of Financial Institutions, and the department appointed the ASI as the liquidating agent. The ASI was able to have another ASI-only credit union to assume all of the liquidated credit union's share account liabilities. To learn more about ASI, please refer to my ASI overview post.

Below is the summary of today's bank and credit union failures.

64th Bank Failure of 2011 (1st in Kansas) (Aug 12th)

  • FDIC Press Release
  • Closed Bank: First National Bank of Olathe, Olathe, KS
  • Size: 6 branches, $538.1 million in assets, $524.3 million in deposits
  • Acquiring Bank: Enterprise Bank & Trust, Clayton, MO
  • Possible Uninsured Deposits: All deposit accounts, excluding the Cede & Co. deposits, have been assumed by Enterprise Bank & Trust
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $116.6 million
  • Enforcement Action: OCC 1/21/10 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 515.79% at DepositAccounts.com (see financial rating note)

1st ASI-Only Credit Union Liquidation of 2011 (Aug 12)

  • ASI Press Release
  • Liquidated CU: Sacramento District Postal Employees Credit Union (SDPECU), Sacramento, CA
  • Size: $20 million in assets and 3,800 members
  • Acquiring CU: Southern California Postal Credit Union, Long Beach, CA
  • Possible Uninsured Deposits: All of SDPECU share account liabilities were assumed by Southern California Postal Credit Union

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.

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Comments
2 Comments.
Comment #1 by cactus posted on
cactus
ASI insurance scares the heck out of me. That outfit is not very big.

3
Comment #2 by Bozo posted on
Bozo
It caused me some concern when Patelco had ASI. I was happy when they reverted to NCUA.

3