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Third Bank Failure of 2014 - Syringa Bank in Idaho

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Third Bank Failure of 2014 - Syringa Bank in Idaho

The third bank failure of 2014 occurred on Friday. Syringa Bank in Boise, Idaho was closed by state regulators, and the FDIC arranged for a purchase and assumption agreement with Sunwest Bank, Irvine, California. According to this Idaho Statesman article, Syringa Bank "never recovered from its real estate losses, which were a result of the Great Recession." The FDIC had issued a prompt corrective action directive against the bank in 2012. A PCA is a sign that a bank is at risk of failure.

January had more bank failures than I had expected. If this pace of bank failures continues, we’ll have 36 by the end of the year. Only 24 banks failed last year.

The closure of Bank of Union was typical. The FDIC was able to find a buyer. Sunwest Bank 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 Sunwest Bank.

CD customers of Syringa 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.

There were no credit union liquidations or new conservatorships this week.

Below is the summary of Friday’s bank failure:

3rd Bank Failure of 2014 (1st in Idaho)

  • Closed Bank: Syringa Bank, Boise ID
  • FDIC Press Release
  • Size: 6 branches, $153.4 million in assets and $145.1 million in deposits
  • Acquiring Bank: Sunwest Bank, Irvine, CA
  • Possible Uninsured Deposits: all deposit accounts, excluding the Cede & Co. deposits, have been assumed by Sunwest Bank (FDIC Q&A)
  • Rate Changes: Syringa Bank’s rates will be reviewed by Sunwest Bank and may be lowered (FDIC Q&A)
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, C- & Texas Ratio of 70.70% at DepositAccounts.com (see financial rating note)

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 are based on September 30, 2013 data.

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Comments
Comment #1 by Anonymous posted on
Anonymous
Why is Bank of Union referenced in the article? 

1