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

Two Banks and One Credit Union Closed by Regulators

POSTED ON BY

Two Banks and One Credit Union Closed by Regulators

Two banks were closed by regulators this Friday. That brings the total number of bank failures for 2012 to 15. Last year at this time there had been 26 bank failures.

Covenant Bank & Trust in Georgia was the first bank that failed. This is the fourth bank failure for 2012 in Georgia, and Georgia remains on top as the state with the most 2012 bank failures. Illinois is not far behind with three failures including Premier Bank which failed this Friday.

The two bank failures were typical with other banks assuming all regular deposits, regardless of the dollar amount. Consequently, no one lost any money on deposit.

The only concern for depositors will be reduced CD rates. The FDIC listed its typical Q&A on interest rates for both banks:

Interest on deposits accrued through close of business on Friday, March 23, 2012, will be paid at your same rate. [The failed bank's] rates will be reviewed by the new bank and may be lowered; however, you will be notified in writing of any changes. You may withdraw funds from any transferred account, regardless of whether your interest rate changes, without early withdrawal penalty until you enter into a new deposit agreement with the new bank.

Stearns Bank acquired Covenant Bank & Trust, and Stearns Bank provided its own FAQs on its website. It provided a little more details regarding interest rates:

If you had a certificate of deposit (CD) with Covenant Bank & Trust, Stearns Bank will send you a letter by March 30, 2012 advising you what it plans to do with current interest rates. You may withdraw funds from any CD without early withdrawal penalty until you enter into a new deposit agreement.

In addition to the two bank closures, there was one credit union liquidation. Saguache County Credit Union in Colorado was liquidated. This was the third credit union liquidation of 2012.

In addition to the one liquidation, the NCUA placed Telesis Community Credit Union in California under conservatorship.

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

14th Bank Failure of 2012 (4th in Georgia)

  • Closed Bank: Covenant Bank & Trust, Rock Spring, GA
  • FDIC Press Release
  • Size: 2 branches, $95.7 million in assets and $90.6 million in deposits
  • Acquiring Bank: Stearns Bank, N.A., St. Cloud, MN
  • Possible Uninsured Deposits: all deposit accounts, including non-DO brokered deposits, have been assumed by Stearns Bank, N.A.
  • Rate Changes: If you had a certificate of deposit (CD) with Covenant Bank & Trust, Stearns Bank will send you a letter by March 30, 2012 advising you what it plans to do with current interest rates (Stearns Bank's FAQ)
  • Estimated Cost to Deposit Insurance Fund: $31.5 million
  • Enforcement Action: FDIC 4/28/10 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 560.51% at DepositAccounts.com (see financial rating note)
15th Bank Failure of 2012 (3rd in Illinois)

  • Closed Bank: Premier Bank, Wilmette, IL
  • FDIC Press Release
  • Size: 2 branches, $268.7 million in assets and $199.0 million in deposits
  • Acquiring Bank: International Bank of Chicago, Chicago, IL
  • Possible Uninsured Deposits: all deposit accounts, excluding the Cede & Co. deposits, have been assumed by International Bank of Chicago
  • Rate Changes: Premier Bank's rates will be reviewed by the new bank and may be lowered (FDIC's Q&A)
  • Estimated Cost to Deposit Insurance Fund: $64.1 million
  • Enforcement Action: FDIC 4/19/10 C&D Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 322.66% at DepositAccounts.com (see financial rating note)

3rd Credit Union Liquidation of 2012 (Mar 23)

  • Liquidated CU: Saguache County Credit Union of Moffat, CO
  • NCUA Press Release
  • Size: 3,185 members and $17 million assets
  • Acquiring CU: Aventa Credit Union, Colorado Springs, CO
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 237.45% at DepositAccounts.com (see financial rating note)

3rd Credit Union Placed into Conservatorship in 2012 (Mar 23)

  • Conserved CU: Telesis Community Credit Union, Chatsworth, CA
  • NCUA Press Release
  • Size: 37,600 members and $318.3 million in assets
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 2 stars & Texas Ratio of 87.01% at DepositAccounts.com (see financial rating note)

Financial Ratings Notes: 0 star is lowest at BauerFinancial, 1 star is lowest at DepositAccounts.com & Bankrate.com, Texas Ratios over 100% is considered at risk. Ratings at DepositAccounts.com and BauerFinancial are based on December 2011 data. Bankrate's ratings are based on September 2011 data.

References:



Related Posts

Comments
1 Comments.


Comment #2 by Apache posted on
Apache
The Sound Dollar Act was discussed on here and I could not find it so I posted it where I felt the poster who requested to see the information might see it.  I did not know I was violating any "comment policy". In the future, I will keep my information to myself.  I apologize to the poster for not being able to share the information with him.  I read the comment policy and still cannot understand how I violated it. 

1