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25th Bank Failure of 2008: Sanderson State Bank in Texas


It's another 2-bank-failure Friday (hopefully we won't see more failures today). Sanderson State Bank in Texas was closed today by Texas regulators, and the FDIC was named receiver. Here's the FDIC's press release link, and here's a summary of the closure:
  • Closed Bank: Sanderson State Bank
  • Location: Sanderson, TX
  • Size: 1 branch, $37 million assets, $27.9 million deposits
  • Possible Uninsured Deposits: ALL deposits transferred to acquiring bank
  • Acquiring Bank: The Pecos County State Bank
  • Cost to Deposit Insurance Fund: $12.5 million (estimated)
  • 2008 closures: 25th bank to be closed this year
  • Financial Ratings: 2 star at BauerFinancial, 1 star at Bankrate.com
This was a very small bank located in the rural area of west Texas. It would be interesting to see how the FDIC officials arrived into Sanderson town. I would think it would have been hard for them to go unnoticed.

Like the Georgia bank that failed today this one is an All-Deposit Transfer in which the acquiring bank assumed all deposits including those above the FDIC limits. Also like the previous bank failure, the new bank hasn't decided if they'll continue the failed bank's rates. And as is common, CD customers of the failed bank can close their CDs without an early withdrawal penalty. The FDIC's Q&A's has the details.

BauerFinancial was a little off on this one. It gave the bank a 2-star rating based on 9/30/08 data. The 2-star rating indicates problematic, but it's two levels above zero, the lowest rating. Bankrate gave it a 1-star rating, its lowest rating.

Here's the FDIC list of all the recent bank failures. I just posted on the new documentation from the FDIC and NCUA that covers all the recent deposit insurance changes (see post).

Thanks to the readers who sent me news of this closure.

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