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Two Small Banks in Minnesota & Missouri Closed by Regulators

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Two small banks were closed by regulators this Friday which brings the 2011 number of bank failures to 76. At this time last year there had been 129 bank failures for 2010.

The two banks that failed were in Minnesota and Missouri. Before this Friday, there had been just one bank failure in these two states. Last year at this time there had been 11 bank closures (7 in Minnesota and 4 in Missouri).

Both of these bank failures were the typical type of bank failures for depositors. The FDIC arranged for two other banks to acquire these two failed banks. All deposit accounts, including brokered deposits, have been assumed by the acquiring banks. Thus, no depositors lost any money, even money above the FDIC limit.

The Missouri bank that failed, Sun Security Bank, was acquired by Great Southern Bank, and it has already decided to keep all of Sun Security Bank's CD rates unchanged until maturity. The FDIC Q&A's just stated the typical line "Current rates will be reviewed by the new bank and may be lowered." However, Great Southern Bank provided its own FAQ document, and in the FAQs, it stated:

If I decide to close my Sun Security Bank CD before maturity, will I be charged?
No. You may withdraw funds from any transferred account without an early withdrawal penalty.

Will my CD earn the same interest rate?
Interest rates on CDs and IRAs will remain in effect until maturity.

It's nice to see Great Southern Bank decided to keep existing CD rates unchanged until maturity. Sun Security Bank's old CD rates are likely much higher than new CD rates that are available today.

This week there were 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.

75th Bank Failure of 2011 (2nd in Minnesota)

  • FDIC Press Release
  • Closed Bank: The RiverBank, Wyoming, MN
  • Size: 6 branches, $417.4 million in assets, $379.3 million in deposits
  • Acquiring Bank: Central Bank, Stillwater, MN
  • Possible Uninsured Deposits: All deposit accounts, including brokered deposits, have been assumed by Central 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: $71.4 million
  • Enforcement Action: FDIC 3/5/09 C&D Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 384.31% at DepositAccounts.com (see financial rating note)
76th Bank Failure of 2011 (1st in Missouri)

  • FDIC Press Release
  • Closed Bank: Sun Security Bank, Ellington, MO
  • Size: 27 branches, $355.9 million assets, $290.4 million in deposits
  • Acquiring Bank: Great Southern Bank, Springfield, MO
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, has been assumed by Great Southern Bank
  • Rate Changes: Interest rates on CDs and IRAs will remain in effect until maturity (bank's FAQ's)
  • Estimated Cost to Deposit Insurance Fund: $118.3 million
  • Enforcement Action: FDIC 4/30/08 C&D Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 287.46% 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.

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