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Two Banks in Tennessee and Arizona Closed by Regulators

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Two banks failed today which is the first time two banks failed on the same day since May 10th. This increases the total number of bank failures for the year to 20. As a comparison, at this time last year there had been 40 bank failures for the year.

The first bank that failed today was Community South Bank in Tennessee. It’s one of the largest banks that has failed this year with 15 branches and $386.9 million in assets. The second failed bank was Sunrise Bank of Arizona which had six branches and $202.2 million in assets.

Both closures 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 both 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 banks 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.

No credit unions failed this week. The total number of credit union liquidations for this year remains at 12.

Below is the summary of today’s bank failures:

19th Bank Failure of 2013 (2nd in Tennessee)

  • Closed Bank: Community South Bank, Parsons, TN
  • FDIC Press Release
  • Size: 15 branches, $386.9 million in assets and $377.7 million in deposits
  • Acquiring Bank: CB&S Bank, Inc. Russellville, AL
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by CB&S Bank, Inc. (FDIC Q&A)
  • Rate Changes: Community South Bank's rates will be reviewed by CB&S Bank, Inc. and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $72.5 million
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 514.72% at DepositAccounts.com (see financial rating note)

20th Bank Failure of 2013 (3rd in Arizona)

  • Closed Bank: Sunrise Bank of Arizona, Phoenix, AZ
  • FDIC Press Release
  • Size: 6 branches, $202.2 million in assets and $196.9 million in deposits
  • Acquiring Bank: First Fidelity Bank, National Association, Oklahoma City, OK
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by First Fidelity Bank, N.A. (FDIC Q&A)
  • Rate Changes: Sunrise Bank of Arizona’s rates will be reviewed by First Fidelity Bank, N.A. and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $17.0 million
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 206.34% 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, BauerFinancial and Bankrate.com are based on March 31, 2013 data.

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