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Two Banks in Florida and Arizona Closed by Regulators

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Two Banks in Florida and Arizona Closed by Regulators

After three Fridays without any bank failures, this Friday we had the first two bank failures for December. And they might be the last for December and 2011 since the next two Fridays are before holiday weekends. If these are the last failures, 2011 will end with a total of 92 bank failures. That's 65 fewer than last year's 157 bank failures, and 48 fewer than 2009's 140 bank failures.

The first bank that failed was Premier Community Bank of the Emerald Coast in Florida. That's the 13th bank to fail in Florida in 2011. Compared to all other states, Florida has the second most 2011 bank failures in the nation, but it's still far behind Georgia which has 23.

The second Friday bank failure was Western National Bank in Arizona. Like Florida, Arizona was hit hard by the real estate bust. However, Arizona has far fewer banks. Consequently, this is just the third bank failure in Arizona for 2011.

The FDIC arranged for Summit Bank, NA to acquire Premier Community Bank and for Washington Federal to acquire Western National Bank. The acquiring banks assumed all deposit accounts. The only exception was at Western National Bank. In that case the brokered deposits from Cede & Co. were not assumed.

I didn't see any mention about the acquiring banks' plans for the existing CDs from the failed banks. The FDIC just had its standard message:

Interest on deposits accrued through close of business the day the bank was closed will be paid at your same rate. Current rates will be reviewed by the new bank and may be lowered; however, you may withdraw funds from any transferred account without early withdrawal penalty until you renew your Certificate of Deposit/enter into a new deposit agreement.

It has been common for acquiring banks to lower rates on existing CDs from the failed banks. That can be costly for depositors since CD rates have gone down so much in the last few years.

Credit Union Liquidations

In the last four weeks the NCUA has liquidated two credit unions. That raises the number of 2011 credit union closures to 14. During this time no credit unions were placed into NCUA conservatorship. The total number of credit union conservatorships in 2011 remains at 10.

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

91st Bank Failure of 2011 (13th in Florida)

  • FDIC Press Release
  • Closed Bank: Premier Community Bank of the Emerald Coast, Crestview, FL
  • Size: 2 branches, $126.0 million in assets and $112.1 million in deposits
  • Acquiring Bank: Summit Bank, N.A., Panama City, FL
  • Possible Uninsured Deposits: All deposit accounts, including brokered deposits, have been assumed by Summit Bank, NA
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC Q&As)
  • Estimated Cost to Deposit Insurance Fund: $31.2 million
  • Enforcement Action: FDIC 1/28/11 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 987.96% at DepositAccounts.com (see financial rating note)
92nd Bank Failure of 2011 (3rd in Arizona)

  • FDIC Press Release
  • Closed Bank: Western National Bank, Phoenix, AZ
  • Size: 3 branches, $162.9 million in assets and $144.5 million in deposits
  • Acquiring Bank: Washington Federal, Seattle, WA
  • Possible Uninsured Deposits: All deposit accounts, excluding the Cede & Co. deposits, have been assumed by Washington Federal
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC Q&As)
  • Estimated Cost to Deposit Insurance Fund: $37.6 million
  • Enforcement Action: OCC 4/4/11 Capital Directive, OCC 7/18/09 Agreement, OCC 10/12/11 PCA
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 232.71% at DepositAccounts.com (see financial rating note)

13th Credit Union Liquidation of 2011 (Nov 30)

14th Credit Union Liquidation of 2011 (Dec 2)

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