April is proving to be a busy month for the FDIC. Two banks were closed by regulators this Friday. That raises the bank failure count to 10 for the nation this year. Half of those closures were in April. At this time last year there had already been 22 bank failures, and at this time in 2011, there had been 39 bank failures.
The first bank that failed this Friday was Parkway Bank of Lenoir, North Carolina. That was the first bank failure of the year for North Carolina. The other failed bank, Douglas County Bank, was the second bank failure of the year for Georgia.
As has been common this year, both of the failed banks were community banks. The largest was Douglas County Bank which had four branches and $316.5 million in assets. It also had a sizable cost to the FDIC's Deposit Insurance Fund ($86.4 million).
Both bank closures were typical with the FDIC arranging for another bank to assume all deposits for each failed bank. All brokered deposits of the two failed banks were also assumed. For both of the failed banks, the FDIC had the following message in its Q&As:
No one lost any money on deposit as a result of the closure of this bank. All deposits, regardless of dollar amount, were transferred to [the new bank].
CD customers of the failed banks will have to wait to see what happens with their rates. The acquiring banks may reduce rates on the existing CDs. However, customers will be allowed to make a penalty-free early withdrawal.
Below is the summary of the bank failures:
9th Bank Failure of 2013 (1st in North Carolina)
- Closed Bank: Parkway Bank, Lenoir, NC
- FDIC Press Release
- Size: 3 branches, $108.6 million in assets and $103.7 million in deposits
- Acquiring Bank: CertusBank, N.A., Easley, SC
- Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by CertusBank, N.A. (FDIC Q&A)
- Rate Changes: Parkway Bank's rates will be reviewed by CertusBank, N.A. and may be lowered (FDIC Q&A)
- Estimated Cost to Deposit Insurance Fund: $18.1 million
- Enforcement Action: FDIC 7/14/10 Consent Order
- Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 206% at DepositAccounts.com (see financial rating note)
10th Bank Failure of 2013 (2nd in Georgia)
- Closed Bank: Douglas County Bank, Douglasville, GA
- FDIC Press Release
- Size: 4 branches, $316.5 million in assets and $314.3 million in deposits
- Acquiring Bank: Hamilton State Bank, Hoschton, GA
- Possible Uninsured Deposits: all deposit accounts, including Brokered Deposits, have been assumed by Hamilton State Bank (FDIC Q&A)
- Rate Changes: Douglas County Bank's rates will be reviewed by Hamilton State Bank and may be lowered (FDIC Q&A)
- Estimated Cost to Deposit Insurance Fund: $86.4 million
- Enforcement Action: FDIC 1/27/09 C&D Order
- Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 2,164.23% 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, at Bankrate.com and at BauerFinancial are based on December 31, 2012 data.
- FDIC list of failed banks
- Texas Ratios for banks and credit unions
- Latest FDIC info on deposit insurance
- My bank failure review posts
- Review of the 2012 bank and credit union failures
- Review of the 2011 bank and credit union failures
- Review of the 2010 bank and credit union failures
- 10 Lessons from the 2008 bank failures