This was a quiet Friday for bank failures. Only one bank failed today. Washington First International Bank in Seattle was closed by Washington State regulators, and the FDIC arranged for East West Bank to assume all deposits including deposits over the FDIC coverage limit. This was the 82nd bank failure of 2010.
Last year East West Bank acquired United Commercial Bank when it failed in November. One thing to note about that acquisition, East West Bank agreed to honor all CD rates. I haven't seen a similar statement this time. According to the FDIC, "East West Bank will review rates and notify you if interest rates will change. Your interest rate may be reduced."
East West Bank released this press release about this acquisition. Here's an excerpt:
East West Bank is the largest bank in the nation focused on serving the Asian American community and this strategically attractive transaction expands East West’s operations in Washington's Puget Sound area. With today’s transaction, East West adds four branches to its Seattle area branch presence for a combined total of 6 branches in the Puget Sound area. East West is now the largest Asian-American bank in Washington.
In addition to a bank failure, there was also a credit union failure this week. Unlike the FDIC, the NCUA doesn't wait till Fridays. The credit union was liquidated on Wednesday. The failed credit union, Orange County Employees Credit Union of Orange, TX, was tiny with only 1,000 members and $1.7 million in assets. The NCUA was able to find a buyer. Sabine Federal Credit Union agreed to assume the assets and liabilities.
Another interesting acquisition was announced by the NCUA today. No failure occurred, but it did involve branches of a weak bank. Wisconsin-based Anchor Bank received permission to sell 11 of its branches to Royal Credit Union. Anchor Bank customers of those branches will become members of Royal Credit Union. It's rare to have a credit union acquire branches from a bank.
Below is a summary of this week's bank and credit union failures:
82nd Bank Failure of 2010 (7th in WA)
- FDIC Press Release
- Closed Bank: Washington First International Bank, Seattle, WA
- Size: 4 branches, $520.9 million in assets, $441.4 million in deposits
- Possible Uninsured Deposits: all deposit accounts transferred
- Acquiring Bank: East West Bank, Pasadena, CA
- Rate Changes: East West Bank will review rates
- Estimated Cost to Deposit Insurance Fund: $158.4 million
- Enforcement Action: FDIC 9/1/09 C&D Order, FDIC 4/1/10 Prompt Correction Action
- Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial
9th Credit Union Liquidation of 2010 (closed on June 9th)
- NCUA Press Release
- Liquidated CU: Orange County Employees Credit Union, Orange, TX
- Size: $1.7 million in assets and served 1,000 members
- Acquiring CU: Sabine FCU, Orange, TX
- Financial Ratings: 3 stars at Bankrate.com, ? stars at BauerFinancial
The above Bankrate.com ratings are based on 12/31/09 data. BauerFinancial ratings are based on 3/31/10 data.