Dedicated to Deposits: Deals, Data, and Discussion
About Ken Tumin About Ken Tumin - Founder and Editor

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

Featured Savings Rates

Popular Posts

Featured Accounts

Four Banks in Florida, Tennessee & Minnesota Closed by Regulators

POSTED ON BY

Four banks failed this Friday which brings the total number of failures for the year to seven. First Guaranty Bank and Trust Company of Jacksonville was the first failure of the day and the second bank failure for the year in Florida. Last year Florida was second in the nation for the state with the most bank failures.

Unlike Florida, Tennessee has avoided bank failures since 2002. That changed on this Friday after two Tennessee banks closed. The first was Tennessee Commerce Bank and the second was BankEast. Many readers may recognize Tennessee Commerce Bank. Accounts were available nationwide, and many of its CDs and savings accounts had been very good deals.

The fourth bank failure of this Friday was Patriot Bank Minnesota. That's the first bank failure in Minnesota for the year. There were only two Minnesota bank failures in 2011.

Tennessee Commerce Bank is the first billion dollar bank to fail this year. It had $1.185 billion in assets and $1.156 billion in deposits. It's interesting to note that it had only one office. It seems likely that a large percentage of its deposits were acquired from the internet.

Tennessee Commerce Bank customers don't have to worry about losing any money. All deposit accounts, excluding some brokered deposits, have been assumed by Republic Bank & Trust Company. That was also the case with the other three bank failures. However, for Patriot Bank Minnesota and BankEast all deposit accounts, including brokered deposits, were assumed by the acquiring banks.

The main concern for Tennessee Commerce Bank customers will be the question of future rates. CD rates may be lowered. Customers can make a penalty free early withdrawal, but as we know, customers will be unlikely to find new CDs with rates close to the old ones. Update 2/1/2012: I was told by a bank CSR that all deposit rates will be lowered to 0.05%. I have more details in this post.

Every once in a while, the acquiring bank will make the decision to keep the CD rates of the failed bank the same until maturity. One bank announced that decision this Friday. U.S. Bank assumed the deposits of BankEast, and in U.S. Bank's Q&As on its website the following was stated:

Your CDs are safe and FDIC insured. The rate remains the same and you will be notified prior to the date your CD matures. If you wish to close your CD, you may do so. Per the terms of the FDIC agreement, you may do so without penalty. However, there is no need to close your CD. The rate remains the same and U.S. Bank is among the nation’s safest and strongest banks.

Unfortunately, I didn't find this same pledge from the other three acquiring banks.

Below is the summary of Friday's bank failures.

4th Bank Failure of 2012 (2nd in Florida)

  • Closed Bank: First Guaranty Bank and Trust Company of Jacksonville, Jacksonville, FL
  • FDIC Press Release
  • Size: 8 branches, $377.9 million in assets and $349.5 million in deposits
  • Acquiring Bank: CenterState Bank of Florida, N.A., Winter Haven, FL
  • Possible Uninsured Deposits: All deposit accounts, excluding the Cede & Co. deposits, have been assumed by CenterState Bank of Florida, N.A.
  • Rate Changes: Some deposit rates on checking or savings accounts may change in accordance with current market indices (bank's Q&A)
  • Estimated Cost to Deposit Insurance Fund: $82.0 million
  • Enforcement Action: FDIC 8/11/10 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 520.46% at DepositAccounts.com (see financial rating note)
5th Bank Failure of 2012 (1st in Tennessee)

  • Closed Bank: Tennessee Commerce Bank, Franklin, TN
  • FDIC Press Release
  • Size: 1 branch, $1.185 billion in assets and $1.156 billion in deposits
  • Acquiring Bank: Republic Bank & Trust Company, Louisville, KY
  • Possible Uninsured Deposits: all deposit accounts, excluding the Cede & Co. deposits, have been assumed by Republic Bank & Trust Company
  • Rate Changes: rates will be reviewed by the new bank and may be lowered (FDIC Q&As) Update 2/1/2012: Rates will be lowered. Refer to this post for details
  • Estimated Cost to Deposit Insurance Fund: $416.8 million
  • Enforcement Action: FDIC 5/25/11 Consent Order
  • , FDIC 11/2/11 PCA
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 272.94% at DepositAccounts.com (see financial rating note)
6th Bank Failure of 2012 (1st in Minnesota)

  • Closed Bank: Patriot Bank Minnesota, Forest Lake, MN
  • FDIC Press Release
  • Size: 3 branches, $111.3 million in assets and $108.3 million in deposits
  • Acquiring Bank: Resource Bank, Savage, MN
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, has been assumed by First Resource Bank
  • Rate Changes: rates will be reviewed by the new bank and may be lowered; however, you will be notified in writing of any changes (FDIC Q&As)
  • Estimated Cost to Deposit Insurance Fund: $32.6 million
  • Enforcement Action: FDIC 9/29/10 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 263.98% at DepositAccounts.com (see financial rating note)
7th Bank Failure of 2012 (2nd in Tennessee)

References:



Related Posts

Comments
21 Comments.
Comment #1 by Truthseeker (anonymous) posted on
Truthseeker
Congratulations to US Bank for not trying to **** over the CD holders of the bank it is acquiring.  Perhaps, one big bank has some ethics? 

In any event, I am now pleased that I have been doing my business banking with US Bank for many years.  They charge more fees than a credit union or community-type bank, but their service is good, and they fulfill any possible need for sophisticated business transactions, including international finance, which I need for my businesses.

Without question USB is an optimum choice for your business banking needs. Banks with similar capabilities, like JP Morgan Chase and/or Citigroup are a part of the world casino banking cartel.  With hundreds of trillions in derivatives obligations, they are pressing the government and Fed to keep rates artificially low, and to engage in heavy financial repression against savers.  If any significant part of their derivatives were ever triggered, the Fed would be forced to print tens of trillions of dollars, over a few months time to save them, which is impossible, so they would fail, regardless of the fact that they are technically "too-big-to-fail".

If you have an account with a casino bank, close it and open one with USB.  USB is a big bank that, for the most part, doesn't get involved in issuing corrupt derivatives or other speculative casino detritis.

1
Comment #2 by Truthseeker (anonymous) posted on
Truthseeker
Oh, yes, one more thing...as you are making money, helped by banking with a relatively straight-laced bank like USB, make sure your profits are plowed back into gold, silver and platinum and NOT into the irredeemable paper-money Ponzi scheme.

The Ponzi scheme is coming to an end, but an attempt is being made to continue it beyond its inevitable collapse time, by victimizing those who put their hard-earned money into long term CDs and bonds.  Savers are getting ****ed by corrupt governments and casino banks. 

In the end, if you invest long term in the dying paper-Ponzi scheme, the stored "value" of your work will be transferred to the boyz at Goldman Sachs, JP Morgan, Citigroup, as well as to people who don't like to work but have votes that can be purchased.  You will have worked hard for nothing.  You will be wiped out, in 10 years or less, by financial repression, in the form of money printing and dollar, pound, yen, Euro debasement. 

To put an earlier end to the paper Ponzi, contribute to the campaign of, and vote for Ron Paul!

1
Comment #3 by lou posted on
lou
Hey Truthseeker (don't you think your name is a bit self-serving,)  you and some other posters keep pumping your metal investments to the point where some of us are wondering what your motives are. Could it be this jihad you are on is an attempt to get as many people as possible to buy these investments to push prices up and maximize profits for yourself. You sound like a snake oil salesman or the penny stock huckster who is now in jail for securities fraud. When guys like you call me with your exotic investment schemes, I immediately look for my wallet and then hang up.

3
Comment #4 by Anonymous posted on
Anonymous
Ok, let's answer a question for me all the ones who are pushing gold and the metals etc.  As I drive down the street of my city, I always see young  boys with signs "Buy our Gold!" etc etc.  iF GOLD is so great then why are all these hawkers so willing to let us give them our "worthless dollars" for their precious Gold!!  Shouldn't they be hoarding all the Gold they can??  If my paper dollars are so worthless why will they still take them and give me that golden metal?  Just curious.  

3
Comment #5 by Iou (anonymous) posted on
Iou
Unfortunately, Iou, you are a fool, and a fool is soon parted with his money.  Gold companies take your dollars, yen, etc., because they have expenses to pay that are denominated in paper currency.  The executives of said companies DO NOT personally save in the form of paper-based Ponzi CDs or bonds.  On the contrary, they own stock in their own companies, own gold bullion and coins, and spend the cash that they need to spend on a current basis. 

Personally, I have nothing to sell, and have no connection to gold.  As a matter of fact, I have often stated that platinum is a better buy right now.  But, only fools buy long term CDs paying 2% or so during a time of heavy financial repression, when the true inflation rate is 10.7 (last month it was 11.2%) and the government is busy lying about that (see www.shadowstats.com)

I do not need fools to buy gold, silver or platinum. Nothing I do or say here is going to affect the value of metals in any significant way whatsoever, because, for the most part, I am a voice in the wind.  Most of the people, like you two, who read this site have blinders on and will not listen to any message that does not comport with what they want to believe, no matter how obvious the message.  Actually, my personal income is several hundred dollars per hour, so it costs me time (and, therefore, money) to write these posts to an audience composed mainly of dedicated fools.  It is also obvious that many of you don't deserve the effort made on your behalf.  But, if I can save one or two of you and your families from financial ruin, by enlightening you to reality, my efforts will have been worthwhile.

This site is excellent for finding the best liquid cash accounts, but buying long-term CDs now, when we are in the middle of a highly inflationary heavy money-printing era, is something only a fool would do.

2
Comment #6 by Truthseeker (anonymous) posted on
Truthseeker
I just noticed that somehow the "Name" on my immediately preceding post came out as Iou, but that was erroneous.  I wrote the previous post that relied to Iou.

1
Comment #7 by Truthseeker (anonymous) posted on
Truthseeker
"relied" should read "referred" to Iou.  Too bad this blog doesn't allow for edits of typos...

1
Comment #8 by Anonymous posted on
Anonymous
I don't know if gold is a bubble or not but if it is a buuble it is the first one everybody knew about.

1
Comment #9 by Anonymous posted on
Anonymous
Could be a buuble but I meant bubble.

1
Comment #10 by Anonymous posted on
Anonymous
It would be nice if the previous comments would stay on topic.  I fail to see where a discussion of gold has anything to do with the 4 failed banks this past week.

2
Comment #12 by Kaight posted on
Kaight
#10 I agree with you.  But this is the internet and adults here are free to behave as children.  Heck, some of those earlier off-topic posts could actually have been posted by children.  Who knows!

I clicked on this because I have $$$ in TCB and I had hoped there might be some serious thoughts being shared here by folks in a similar situation.  As Ken pointed out, loss of funds won't happen.  Impaired access could happen, though, moving forward after Republic works its magic.  There is no way to know now.  I called the bank today.  Felt sorry for the employees.  They are nice people who might soon be out of a job.  That pretty much puts my own concerns into perspective.  The entire TCB situation is just one more Obamanation, one of thousands.  Pretty soon, the way things are unfolding, there won't be any wealth left to redistribute.

6
Comment #11 by Bob A. (anonymous) posted on
Bob A.
I just checked my Capital One Online Savings, the rate is now down to 0.70%

1
Comment #13 by Anonymous posted on
Anonymous
As a CD holder with the now-failedTennessee Commerce Bank (TCB), I've just read, while accessing TCB's website, the comment of Republic Bank and Trust (RB&T), the bank that has just now acquired TCB's deposits, RB&T's alert to depositors of possible rate changes to "competitive" rates--a prime example of a phony, double-talk term. Look at the facts: The TCB CD product was for a fixed term (with one no-penalty withdrawal, partial or full allowed), at a fixed rate, for a fixed term , and was offered to customers who had a regular savings account with TCB immediately following TCB's lowering of its savings rates. RB&T had to have known those facts begore acquiring TCB. If Republic insists on having what it terms "competitive" rates, those rates should be required, legally,to be rates applicable to a new transaction, not one that has already occurred. If they believe in and try to apply "competitive" rates ex post facto, I'm out as an RB&T depositor for good.

2
Comment #14 by Anonymous posted on
Anonymous
I'm with #13," "changes to "competitive" rates--a prime example of a phony, double-talk term"is weasel talk!I'm

getting my closing form ready to go NOW.

1
Comment #15 by pearlbrown posted on
pearlbrown
Sorry for the disappointment, and I realize this action comes at a bad time for CD rates.  However, when financial institutions buy or take over others, they are under no obligation to maintain the same rates on the CDs (although many do).  That is why the health of the institution is an important factor to consider when purchasing a CD. 

1
Comment #16 by Anonymous posted on
Anonymous
#15. Aside from the generality in your comment regarding the factor or the health of a financial institution, I'd suggest a good look at the particular facts of every situation involving an acquisition. In this case, Tennessee Commerce's total assets were $1.185 billion, Republic purchased Tennessee Commerce's deposits and only $203.9 million of Tennessee Commerce's assets, and the FDIC's fund (see the FDIC Press Release re this acquisiton) expects to lose $416.8 million. Rather a sweet deal for Republic, don't you think, especially if it lowers interest rates for existing CD depositors? Republic has now expanded into Tennessee--as it wished. However, not so sweet a deal for some. Sorry, phony is phony, and Republic appears to be sending a signal in its web post that it isn't going to be one of the "many" who, regardless of the facts applicable to the situation, given half a chance, aren't above using "weasel" talk, as number 14 says, to zap current depositors.

1
Comment #18 by pearlbrown posted on
pearlbrown
#16 Banks act in the interests of their shareholders, not their accountholders and are never above "weasel talk", even in day-to-day operations. 

1
Comment #17 by Kaight posted on
Kaight
My earlier post, above, was written on Monday.  Unknown to me then, Monday was the final day for the high (ca. 1.59%) rate on my TCB CD.  When I checked early Tuesday morning, I rubbed my still-sleepy eyes in disbelief as I stared at the new "competitive" rate on my screen:  0.05%!!!!

I called the bank at its opening and got through right away.  This told me two things:  First, the new "competitive" rate of 0.05% was confirmed by a live person.  Second, it told me that many other customers had fallen into the trap, and had not yet checked the internet for rate changes.  Face facts:  The bank failed Friday.  The old rate held for Saturday, for Sunday, and also for Monday.  This had the effect of lulling some customers into a false sense that their existing rate might continue for a short while (perhaps a week or two).  People are really busy.  Not everyone checks something like this every hour, or even every day.  And the bank knows that.  

As I worked Tuesday to extricate myself, I had need to telephone the bank several times.  Later on I did encounter a couple of short delays reaching a representative, but it was never overwhelming.  And I was able to close my account successfully.  This says to me there remain customers who still are unaware of what has happened.

It's an assumption on my part, but I believe Republic likely snail mailed notice of what they did.  Meanwhile they have control of millions of dollars of deposits for which they are paying virtually zero interest .  It's a sweet deal for them . . a really sweet deal.  And I believe everything they've done is with malice of forethought.

4
Comment #19 by Anonymous posted on
Anonymous
The talk of weasely banks is what makes gold a very important discussion in this forum.  Gold is an alternative to dollars.  For most people, who choose not to lend it out, it does not earn a rate of interest.  To those willing to lend it, it can produce a return, but, unlike dollars, which can be printed ad infinitum, if you lend out your gold, and the borrower doesn't pay you back, you lose the value of the loan.

Although highly volatile, for reasons many believe are intentional interventions by central banks, over a very long term span of decades, gold, silver and platinum will always rises in price.  The dollar, after all, is now worth only 0.6% of its original value in 1914, when the USA went off the pure gold standard, with the opening of the Federal Reserve and the current banking system.

So, precious metals are viable alternatives to CDs, as places to store value, in a world in which governments lie about inflation, central planners collapse interest rates by printing wads of new money, and banks try to cheat CD holders.

1
Comment #20 by Cayenne (anonymous) posted on
Cayenne
For the past 3 years we were fortunate enough to benefit from the above average rate offerings of TN Commerce Bank.  While we speculated they were in financial trouble in early Fall 2011, today we received official notice of their failure and takeover by Republic.  The Republic "rip-off" is in effect, immediately reducing rates to .50%.  Time to take this show on the road... 

1
Comment #21 by Kaight posted on
Kaight
Cayenne

You missed a decimal point there, sport!  A rate of  0.50%, while low, might actually be considered competitive.  But, contrary to what you posted, the new rate is not 0.50%.  The new rate is 0.05%, one tenth of what you posted.  It might just as well be zero.

1