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3 Banks Closed by Regulators in Florida, Georgia and Tennessee

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June is turning out to be a busy month for the FDIC. There were 3 more bank failures this Friday which brings the number of bank failures for the year to 31. At this time last year, there had been 47 bank failures for the year, and at this time in 2010 there had been 83 bank failures.

The 3 bank that failed were in Florida, Georgia and Tennessee. All 3 of these states have had multiple bank failures this year. Georgia continues to have the lead with 5 bank failures. Florida is close behind with 4 bank failures.

All 3 banks that failed were small. Each had under $200 million in assets. Putnam State Bank in Florida had $169.5 million in assets. Security Exchange Bank in Georgia had $151.0 million in assets, and The Farmers Bank of Lynchburg in Tennessee had $163.9 million in assets.

For all 3 bank failures, the FDIC arranged for other banks to assume all deposits, even deposits over the FDIC limit. The FDIC's Q&As for each bank had the same message: "no one lost any money on deposit as a result of the closure of this bank".

Two of the acquiring banks did not have any news on their websites regarding their acquisitions of these failed banks. For information about what will happen to CD rates at the failed banks, only the FDIC Q&As provide any details. The FDIC gave its typical paragraph on interest rates:

Interest on deposits accrued through close of business on June 15, 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.

The last bank that failed, The Farmers Bank of Lynchburg, was acquired by Clayton Bank and Trust. Clayton Bank did include some information on its website regarding rate changes. Unfortunately, it adds little to the FDIC Q&A. Here's that information:

We are in the process of evaluating the rates on our interest bearing deposit accounts. If your certificate of deposit rates are affected by a rate change as of the date of the acquisition you will receive Notice in the "Depositor Letter" referenced below advising you of any changes. Please read the document carefully.

Interest rates and annual percentage yields on checking, savings and money market accounts are subject to change at any time.

You can withdraw some or all of your funds from your deposit accounts without penalty until you enter into a new deposit agreement with Clayton Bank and Trust, provided you are not using your deposits to secure a loan.

If you currently receive interest payments, those payments will continue without interruption.

There were no credit union liquidations this week. The number of credit union liquidations for the year remain at 7. The last 2 closures took place on May 31st and June 1st.

Below is the summary of today's bank failures:

29th Bank Failure of 2012 (4th in Florida)

  • Closed Bank: Putnam State Bank, Palatka, FL
  • FDIC Press Release
  • Size: 3 branches, $169.5 million in assets and $160.0 million in deposits
  • Acquiring Bank: Harbor Community Bank, Indiantown, FL
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, has been assumed by Harbor Community Bank
  • Rate Changes: Putnam State Bank's rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $37.4 million
  • Enforcement Action: FDIC 6/17/10 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 513.27% at DepositAccounts.com (see financial rating note)
30th Bank Failure of 2012 (5th in Georgia)

  • Closed Bank: Security Exchange Bank, Marietta, GA
  • FDIC Press Release
  • Size: 2 branches, $151.0 million in assets and $147.9 million in deposits
  • Acquiring Bank: Fidelity Bank, Atlanta, GA
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by Fidelity Bank
  • Rate Changes: Security Exchange Bank's rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $34.3 million
  • Enforcement Action: FDIC 3/10/09 C&D Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 1,227.35% at DepositAccounts.com (see financial rating note)
31st Bank Failure of 2012 (3rd in Tennessee)

  • Closed Bank: The Farmers Bank of Lynchburg, Lynchburg, TN
  • FDIC Press Release
  • Size: 4 branches, $163.9 million in assets and $156.4 million in deposits
  • Acquiring Bank: Clayton Bank and Trust, Knoxville, TN
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by Clayton Bank and Trust
  • Rate Changes: The Farmers Bank of Lynchburg's rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $28.3 million
  • Enforcement Action: FDIC 11/18/11 Consent Order, FDIC 11/21/11 PCA
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 95.52% 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 March 2012 data. Ratings at Bankrate.com are based on December 2011 data.

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