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4 Banks Closed by Regulators in Oklahoma, Illinois and in the Carolinas

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4 Banks Closed by Regulators in Oklahoma, Illinois and in the Carolinas

After 3 weeks with no bank failures, the FDIC was back in action this Friday with 4 bank closures. That's twice the number of banks that failed for all of May. This brings the number of bank failures for the year to 28. At this time last year, there had been 45 bank failures for the year, and at this time in 2010 there had been 81 bank failures.

Two states, Oklahoma and North Carolina, had their first bank failures of the year. The other two bank failures occurred in South Carolina and Illinois. These failures were the second of the year for these two states.

All 4 banks that failed were small. The first 3 that failed were very small with 1 to 2 branches and with assets under $100 million. These were First Capital Bank in Oklahoma, Carolina Federal Savings Bank in South Carolina and Farmers and Traders State Bank in Illinois. The last bank that failed, Waccamaw Bank in North Carolina, was more sizable with 16 branches and $533 million in assets.

For all 4 bank failures, the FDIC arranged for other banks to assume all deposits, even deposits over the FDIC limit. The only exception was Waccamaw Bank. In that case some brokered deposits were not assumed by the acquiring bank. However, even for the Waccamaw Bank closure, the FDIC stated in its Q&As that "no one lost any money on deposit as a result of the closure of this bank".

None of the 4 acquiring banks had 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. For all 4 bank failures, the FDIC gave its typical paragraph on interest rates:

Interest on deposits accrued through close of business on June 8, 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 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 in the previous week.

Below is the summary of today's bank failures:

25th Bank Failure of 2012 (1st in Oklahoma)

  • Closed Bank: First Capital Bank, Kingfisher, OK
  • FDIC Press Release
  • Size: 1 branch, $46.1 million in assets and $44.8 million in deposits
  • Acquiring Bank: F & M Bank, Edmond, OK
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by F & M Bank
  • Rate Changes: First Capital Bank’s rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $5.6 million
  • Enforcement Action: FDIC 10/7/10 Consent Order, FDIC 11/14/11 PCA
  • Financial Ratings: 1 star at Bankrate.com, ? star at BauerFinancial, 1 star & Texas Ratio of 464.13% at DepositAccounts.com (see financial rating note)
26th Bank Failure of 2012 (2nd in South Carolina)

  • Closed Bank: Carolina Federal Savings Bank, Charleston, SC
  • FDIC Press Release
  • Size: 2 branches, $54.4 million in assets and $53.1 million in deposits
  • Acquiring Bank: Bank of North Carolina, Thomasville, NC
  • Possible Uninsured Deposits: all deposit accounts, including any brokered deposits, have been assumed by Bank of North Carolina
  • Rate Changes: Carolina Federal Savings Bank's rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $15.2 million
  • Enforcement Action: OTS 7/27/10 C&D Order
  • Financial Ratings: 1 star at Bankrate.com, ? star at BauerFinancial, 1 star & Texas Ratio of 466.34% at DepositAccounts.com (see financial rating note)
27th Bank Failure of 2012 (2nd in Illinois)

  • Closed Bank: Farmers and Traders State Bank, Shabbona, IL
  • FDIC Press Release
  • Size: 2 branches, $43.1 million in assets and $42.3 million in deposits
  • Acquiring Bank: First State Bank, Mendota, IL
  • Possible Uninsured Deposits: all deposit accounts, including any brokered deposits, have been assumed by First State Bank
  • Rate Changes: Farmers' and Traders' State Bank’s rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $8.9 million
  • Enforcement Action: FDIC 9/13/11 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, ? star at BauerFinancial, 1 star & Texas Ratio of 362.21% at DepositAccounts.com (see financial rating note)
28th Bank Failure of 2012 (1st in North Carolina)

  • Closed Bank: Waccamaw Bank, Whiteville, NC
  • FDIC Press Release
  • Size: 16 branches, $533.1 million in assets and $472.7 million in deposits
  • Acquiring Bank: First Community Bank, Bluefield, VA
  • Possible Uninsured Deposits: all deposit accounts, excluding the Cede & Co. deposits have been assumed by First Community Bank
  • Rate Changes: Waccamaw Bank's rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $51.1 million
  • Enforcement Action: Federal Reserve 6/14/10 Written Agreement
  • Financial Ratings: 1 star at Bankrate.com, ? star at BauerFinancial, 1 star & Texas Ratio of 300.30% 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 are based on March 2012 data. Ratings at Bankrate.com are based on December 2011 data.

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