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5 Banks in Maryland, Minnesota, South Carolina & California Closed by Regulators

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This was a busy Friday for the FDIC with 5 bank failures. That's the highest one-day total this year. The total number of bank failures for the year is now 22. That's still a lot less than last year. By April 29th of last year there had been 39 bank failures.

Maryland had its first two failures of the year with the closures of Bank of the Eastern Shore and HarVest Bank of Maryland. South Carolina and California also had their first bank failures of the year. Plantation Federal Bank was in South Carolina and Palm Desert National Bank was in California. Bank failures have been more common in Minnesota this year. Today's closure of Inter Savings Bank was the third bank failure for the state.

Four of the bank failures were the typical closures with the FDIC arranging for another bank to assume all deposits, even deposits over the insurance limits. However, there was no buyer for Bank of the Eastern Shore. Thus, depositors who exceeded the insurance limits may lose their uninsured deposits. That is the third bank this year that failed without a buyer.

One nice thing that the FDIC did in the case for Bank of the Eastern Shore is to created a temporary bank to give depositors about four weeks to move their checking and savings accounts to other banks. The FDIC didn't do this for the last two banks that failed this year without buyers. Customers with just CDs and IRAs will have to wait for their insured deposits to come by check. This typically takes a week.

Those who have CDs at the other 4 failed banks may not need to close their CDs, but they may want to if the acquiring banks decide to reduce the CD rates. None of the 4 banks have any information on their websites describing what will happen to the CD rates. The FDIC has its typical note for each of these banks:

Interest on deposits accrued through close of business on April 27, 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.

There have been no credit union liquidations since March 26th when Shepherd’s Federal Credit Union in North Carolina became the fourth credit union closed in 2012.

Below is the summary of today's bank failures:

18th Bank Failure of 2012 (1st in Maryland)

  • Closed Bank: Bank of the Eastern Shore, Cambridge, MD
  • FDIC Press Release
  • Size: 2 branches, $166.7 million in assets and $154.5 million in deposits
  • Acquiring Bank: None
  • Possible Uninsured Deposits: At the time of closing, the amount of deposits exceeding the insurance limits were undetermined
  • Rate Changes: N/A
  • Estimated Cost to Deposit Insurance Fund: $41.8 million
  • Enforcement Action: Federal Reserve 8/31/10 written agreement, Federal Reserve 8/8/11 PCA
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 161.89% at DepositAccounts.com (see financial rating note)
19th Bank Failure of 2012 (2nd in Maryland)

  • Closed Bank: HarVest Bank of Maryland, Gaithersburg, MD
  • FDIC Press Release
  • Size: 4 branches, $164.3 million in assets and $145.5 million in deposits
  • Acquiring Bank: Sonabank, McLean, VA
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by Sonabank
  • Rate Changes: Harvest Bank of Maryland's rates will be reviewed by the new bank and may be lowered
  • Estimated Cost to Deposit Insurance Fund: $17.2 million
  • Enforcement Action: FDIC 7/2/10 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 451.40% at DepositAccounts.com (see financial rating note)
20th Bank Failure of 2012 (3rd in Minnesota)

  • Closed Bank: Inter Savings Bank, fsb D/B/A InterBank, fsb, Maple Grove, MN
  • FDIC Press Release
  • Size: 4 branches, $481.6 million in assets and $473.0 million in deposits
  • Acquiring Bank: Great Southern Bank, Reeds Spring, MO
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by Great Southern Bank
  • Rate Changes: Interbank’s rates will be reviewed by the new bank and may be lowered (FDIC Q&A's)
  • Estimated Cost to Deposit Insurance Fund: $117.5 million
  • Enforcement Action: OTS 6/19/09 C&D Order, OTS 3/18/10 PCA
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 245.31% at DepositAccounts.com (see financial rating note)
21st Bank Failure of 2012 (1st in South Carolina)

  • Closed Bank: Plantation Federal Bank, Pawleys Island, SC
  • FDIC Press Release
  • Size: 6 branches, $486.4 million in assets and $440.5 million in deposits
  • Acquiring Bank: First Federal Bank, Charleston, SC
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, has been assumed by First Federal Bank
  • Rate Changes: Plantation Federal Bank's rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $76.0 million
  • Enforcement Action: OTS 6/30/10 C&D Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 460.03% at DepositAccounts.com (see financial rating note)
22nd Bank Failure of 2012 (1st in California)

  • Closed Bank: Palm Desert National Bank, Palm Desert, CA
  • FDIC Press Release
  • Size: 1 branch, $125.8 million in assets and $122.8 million in deposits
  • Acquiring Bank: Pacific Premier Bank, Costa Mesa, CA
  • Possible Uninsured Deposits: all deposit accounts, excluding the Cede & Co deposits, has been assumed by Pacific Premier Bank
  • Rate Changes: Palm Desert National Bank's rates will be reviewed by the new bank and may be lowered (FDIC's Q&A)
  • Estimated Cost to Deposit Insurance Fund: $20.1 million
  • Enforcement Action: OCC 1/5/10 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 628.95% 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 are based on December 2011 data.

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