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One Florida Bank Closed by State Regulators

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One Florida Bank Closed by State Regulators

It has been awhile since we last had a Friday bank failure. That was on June 7th. The streak of quiet Fridays ended today with the failure of First Community Bank of Southwest Florida. This was the 17th bank failure of 2013 and the third bank failure in Florida. The pace of bank failures has gone down substantially. As a comparison, at this time last year there had been 40 bank failures for the year.

Today’s bank failure was 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 bank:

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 C1 Bank.

CD customers of the failed bank will have to wait to see what happens with their rates. The acquiring bank may reduce rates on the existing CDs. However, customers will be allowed to make a penalty-free early withdrawal.

A couple of weeks ago, one credit union failed. Taupa Lithuanian Credit Union of Cleveland was closed by Ohio regulators on July 15th, and the NCUA was appointed as the liquidating agent. The NCUA was not able to find another credit union to purchase the failed credit union. Thus, members had to wait for the NCUA to mail them checks of their insured deposits. Members with deposits over the NCUA coverage limits may have lost their uninsured deposits.

In the last few months we have been seeing more credit union failures than banks, and if this keeps up, we may end the year with more credit union failures than bank failures. Taupa Lithuanian was the 12th credit union to fail this year. At this time last year, only 8 credit unions had failed.

Below is the summary of the recent bank and credit union failures:

17th Bank Failure of 2013 (3rd in Florida)

  • Closed Bank:First Community Bank of Southwest Florida, Fort Myers, FL (also operating as Community Bank of Cape Coral)
  • FDIC Press Release
  • Size: 7 branches, $265.7 million in assets and $254.2 million in deposits
  • Acquiring Bank: C1 Bank, Saint Petersburg, FL
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by C1 Bank (FDIC Q&A)
  • Rate Changes: First Community Bank of Southwest Florida, also operating as Community Bank of Cape Coral’s rates will be reviewed by C1 Bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $27.1 million
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 427.70% at DepositAccounts.com (see financial rating note)

12th Credit Union Liquidation of 2013 (July 15)

  • Liquidated CU: Taupa Lithuanian Credit Union, of Cleveland, Ohio
  • NCUA Press Release
  • Size: 1,154 members and had assets of more than $23.6 million
  • Acquiring CU: None

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, BauerFinancial and Bankrate.com are based on March 31, 2013 data.

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