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4 Small Banks in 4 States Closed by Regulators

POSTED ON BY

Four small banks were closed by regulators this Friday. It was the busiest Friday for the FDIC since July 15th when four banks also failed. The number of bank failures for the year is now up to 80. At this time last year there had been 132 bank failures for 2010.

There was another Georgia bank failure this Friday. That makes 20 bank failures for this year. Georgia is far out in front with the most 2011 bank failures.

On the other end, New Jersey had its first bank failure and North Carolina had its second failure in 2011. In the middle was Illinois which had its eighth bank failure of the year.

For each bank failure, the FDIC arranged for another bank to assume all deposits of the failed bank. The only exception was the Illinois bank that didn't have some of its brokered deposits assumed. So no one with regular deposits lost any money even if they had over the FDIC limit.

The FDIC has been quite successful this year in finding buyers for the failed banks. Based on my quick review of this year's bank failures, I could find only two failed banks in January that were not acquired by another bank.

With another bank assuming all of the deposits of the failed bank, the only thing depositors will have to worry about is losing the high interest rate of their CDs. For all four banks, the FDIC Q&A's just stated the typical line "Current rates will be reviewed by the new bank and may be lowered." I couldn't find any more details on the websites of the acquiring banks about their plans for existing CDs.

This was another week with no credit union liquidations or credit unions placed into NCUA conservatorship. So far this year there have been 12 credit union liquidations and 10 credit unions that have been placed into conservatorships.

Below is the summary of Friday's bank failures.

77th Bank Failure of 2011 (20th in Georgia)

  • FDIC Press Release
  • Closed Bank: Piedmont Community Bank, Gray, GA
  • Size: 2 branches, $201.7 million in assets, $181.4 million in deposits
  • Acquiring Bank: State Bank and Trust Company, Macon, GA
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, has been assumed by State 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: $71.6 million
  • Enforcement Action: FDIC 11/23/09 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 747.60% at DepositAccounts.com (see financial rating note)
78th Bank Failure of 2011 (2nd in North Carolina)

  • FDIC Press Release
  • Closed Bank: Blue Ridge Savings Bank, Inc., Asheville, NC
  • Size: 10 branches, $161.0 million in assets, $158.7 million in deposits
  • Acquiring Bank: Bank of North Carolina, Thomasville, NC
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by Bank of North Carolina
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC's Q&As)
  • Estimated Cost to Deposit Insurance Fund: $38.0 million
  • Enforcement Action: FDIC 11/12/08 C&D Order, FDIC 5/28/10 PCA
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 672.92% at DepositAccounts.com (see financial rating note)
79th Bank Failure of 2011 (1st in New Jersey)

  • FDIC Press Release
  • Closed Bank: First State Bank, Cranford, NJ
  • Size: 2 branches, $204.4 million in assets, $201.2 million in deposits
  • Acquiring Bank: Northfield Bank, Staten Island, NY
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, has been assumed by Northfield Bank
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC's Q&As)
  • Estimated Cost to Deposit Insurance Fund: $45.8 million
  • Enforcement Action: FDIC 7/15/11 Amended Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 189.42% at DepositAccounts.com (see financial rating note)
80th Bank Failure of 2011 (8th in Illinois)

  • FDIC Press Release
  • Closed Bank: Country Bank, Aledo, IL
  • Size: 2 branches, $190.6 million in assets, $167.5 million in deposits
  • Acquiring Bank: Blackhawk Bank & Trust, Milan, IL
  • Possible Uninsured Deposits: all deposit accounts, excluding the Cede & Co. deposits, have been assumed by Blackhawk Bank & Trust
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC's Q&As)
  • Estimated Cost to Deposit Insurance Fund: $66.3 million
  • Enforcement Action: FDIC 2/3/11 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 367.01% 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. DepositAccounts.com and BauerFinancial ratings are based on June 2011 data. Bankrate ratings are based on March 2011 data.

References:


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Comments
2 comments.
Comment #1 by Wil posted on
Wil
First State Bank (Cranford, NJ) had a history of maintaining some of the highest deposit rates in New Jersey. What a shame!

2
Comment #2 by Paoli (anonymous) posted on
Paoli
From my experience, whenever one finds a bank in the area having higher rates than most others, if you check them out, you will probably find their ratings on Bauer and/or Bankrate have gone down.  They give the higher rates because they need the deposits more than others, imo.  However, that is not to say that I won't buy CDs from them and cross my fingers they stay open at least until my CDs mature.  We do what we have to do to survive in this drastic interest rate scenario.

4