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One Small Texas Bank Closed By Regulators

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One Small Texas Bank Closed By Regulators

After six weeks without bank failures, the streak was broken today by the failure of one small Texas bank, Texas Community Bank, N.A. Another interesting thing to note about today’s failure is that it fell on Friday the 13th. Three months ago two banks failed on Friday the 13th in September. Today’s bank failure may be the last for the year since the next two Friday’s will be near the holidays. If that’s the case, we’ll end 2013 with only 24 bank failures. That’s less than half of the number that failed in 2012.

The year that had the most bank failures after the last financial crisis was 2010 when 157 banks failed. Since then each year there have been fewer bank failures. Below is a summary of the bank failure numbers since 2005:

  • 2005: 0
  • 2006: 0
  • 2007: 3
  • 2008: 25
  • 2009: 140
  • 2010: 157
  • 2011: 92
  • 2012: 51
  • 2013: 24 (as of Dec. 13)

The closure of Texas Community Bank, N.A. was typical. The FDIC was able to find a buyer. Spirit of Texas Bank, SSB agreed to assume all of the deposits. Consequently, no one lost any money. According to the FDIC FAQs:

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 Spirit of Texas Bank, SSB.

CD customers of Texas Community Bank, N.A. 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.

There weren’t any credit union closure today, but there was one closure last month. It was the Polish Combatants Credit Union of Bedford, Ohio. That was the 14th credit union liquidation of the year. It was a tiny credit union with only 52 members and $120,450 in assets. The NCUA didn’t find a buyer, probably since it was too small for any credit union to want it. Thus, they will be issuing checks to depositors. The total number of credit union liquidations for this year is now 14.

Below is the summary of today’s bank failure and last month’s credit union liquidation:

24th Bank Failure of 2013 (2nd in Texas)

  • Closed Bank:Texas Community Bank, N.A.
  • FDIC Press Release
  • Size: 2 branches, $160.1 million in assets and $142.6 million in deposits
  • Acquiring Bank:Spirit of Texas Bank, SSB, College Station, TX
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, has been assumed by Spirit of Texas Bank, SSB (FDIC Q&A)
  • Rate Changes: rates will be reviewed by Spirit of Texas Bank, SSB and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $10.8 million
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, F & Texas Ratio of 784.46% at DepositAccounts.com (see financial rating note)

14th Credit Union Liquidation of 2013 (Nov 22)

  • Liquidated CU:Polish Combatants Credit Union, Bedford, OH
  • NCUA Press Release
  • Size:52 members and assets of $120,450
  • Acquiring CU: None

Financial Ratings Notes: 0 star is lowest at BauerFinancial, 1 star is lowest at Bankrate.com and an F is lowest at DepositAccounts.com &, Texas Ratios over 100% is considered at risk. Ratings at DepositAccounts.com and BauerFinancial are based on September 30, 2013 data. Ratings at Bankrate.com are based on June 30, 2013 data.

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