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Two Banks Closed by Regulators This Week

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In addition to the common Friday bank failure, there was a rare Thursday bank closure. That bank was 1st Commerce Bank of North Las Vegas, Nevada. It was another subsidiary to Capitol Bancorp which has already had other of its subsidiary banks fail this year. This Calculated Risk blog post has a good review of how and why the FDIC closed this bank. This was a small bank with just one branch and with assets of just $20 million.

The Friday bank failure was Mountain National Bank of Sevierville, Tennessee. This bank was larger than many of the banks that have failed this year. It had 12 branches and assets of $437 million.

After these two closures, the total number bank failures in the nation for the year is up to 16. At this time last year there had been 28 bank failures.

Both bank failures were typical in that the FDIC was able to find another bank to assume all deposits. The FDIC had the following message in its Q&As for the two banks:

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 acquiring bank]

CD customers of the failed bank 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 this week’s bank failures:

15th Bank Failure of 2013 (1st in Nevada) (June 6)

  • Closed Bank:1st Commerce Bank, North Las Vegas, Nevada
  • FDIC Press Release
  • Size: 1 branch, $20.2 million in assets and $19.6 million in deposits
  • Acquiring Bank: Plaza Bank, Irvine, CA
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by Plaza Bank (FDIC Q&A)
  • Rate Changes: rates will be reviewed by Plaza Bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $9.4 million
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 157.6% at DepositAccounts.com (see financial rating note)

16th Bank Failure of 2013 (1st in Nevada) (June 7)

  • Closed Bank:Mountain National Bank, Sevierville, Tennessee
  • FDIC Press Release
  • Size: 12 branches, $437.3 million in assets and $373.4 million in deposits
  • Acquiring Bank: First Tennessee Bank, National Association, Memphis, TN
  • Possible Uninsured Deposits: all deposit accounts, excluding the Cede & Co. desposits, have been assumed by First Tennessee Bank, N.A. (FDIC Q&A)
  • Rate Changes: Mountain National Bank's rates will be reviewed by First Tennessee Bank, N.A. and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $33.5 million
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 295.84% 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 31, 2013. Ratings at Bankrate.com are based on December 31, 2012 data.

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