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Two Banks Fail in Virginia and California

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The 21-branch Bank of the Commonwealth in Virginia and the 7-branch Citizens Bank of Northern California failed this Friday. That puts the 2011 total number of failed banks at 73. As of this time last year there had been 127 bank failures for 2010. Citizens Bank was the fourth bank failure in California this year. That puts California in fifth place for the most number of bank failures for 2011. The 2011 leaders are Georgia with 19 bank failures, Florida with 11 failures, Illinois with 7 failures and Colorado with 5.

The two recent bank failures were the typical kind for depositors. All regular deposits were assumed by other banks, and the acquiring banks haven't made a decision on interest rates of existing CDs. This is based on the FDIC's Q&A for the bank failures. I also checked the acquiring banks' websites, and I couldn't find any mentions of their interest-rate plans.

There weren't any credit union liquidations this week. However, the NCUA did place one Oregon credit union into conservatorship.

No deposits are affected when a credit union is placed into conservatorship. However, if the NCUA determines that the credit union can't be saved, it will be liquidated. So members who find their credit union placed into conservatorship should immediately ensure that all of their deposits are below the NCUA deposit coverage limits.

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

72nd Bank Failure of 2011 (2nd in Virginia)

  • FDIC Press Release
  • Closed Bank: Bank of the Commonwealth, Norfolk, VA
  • Size: 21 branches, $985.1 million in assets, $901.8 million in deposits
  • Acquiring Bank: Southern Bank and Trust Company, Mount Olive, NC
  • Possible Uninsured Deposits: All deposit accounts, excluding the Cede & Co deposits, have been assumed by Southern Bank and Trust Company
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $268.3 million
  • Enforcement Action: Federal Reserve 7/2/10 Written Agreement, Federal Reserve 7/1/11 PCA
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 260.05% at DepositAccounts.com (see financial rating note)
73rd Bank Failure of 2011 (4th in California)

  • FDIC Press Release
  • Closed Bank: Citizens Bank of Northern California, Nevada City, CA
  • Size: 7 branches, $288.8 million in assets, $253.1 million in deposits
  • Acquiring Bank: Tri Counties Bank, Chico, CA
  • Possible Uninsured Deposits: All deposit accounts have been assumed by Tri Counties 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: $37.2 million
  • Enforcement Action: FDIC 2/11/10 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 165.68% at DepositAccounts.com (see financial rating note)

10th Credit Union Conservatorship of 2011 (Sep 23)

  • NCUA Press Release
  • CU placed into conservatorship: Chetco Federal Credit Union, Harbor, OR
  • Size: $333 million in assets and serves 32,435 members
  • Financial Ratings: 1 stars at Bankrate.com, 0 star at BauerFinancial, 1 stars & Texas Ratio of 233.01% at DepositAccounts.com (see 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. DepositAccounts.com and BauerFinancial ratings are based on June 2011 data. Bankrate ratings are based on March 2011 data.

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