This was another quiet Friday for bank failures. Just like last Friday, only one bank failed today. Nevada Security Bank in Reno became the 83rd bank failure of 2010 when it was closed today by Nevada regulators. Also closed was Silverado Bank which was just a branch of this bank that operated in Roseville, California. The FDIC arranged for all non-brokered customer deposits, both insured and uninsured, to be assumed by Umpqua Bank.
Umpqua Bank has a FAQs document which provides more details than the FDIC closure Q&As. Couple of notable FAQs include:
Q: Will I continue to earn interest at the same rate?
A: It is Umpqua Bank’s intention to maintain the current rates on all deposits unless we find a specific rate to be above market pricing. Future rate changes may be made as the competitive market dictates.
Q: Will I incur an early withdrawal penalty if I close my CD before maturity?
A: No. You may withdraw funds from any transferred account without an early withdrawal penalty until you enter into a new deposit agreement with Umpqua Bank.
It appears Umpqua Bank may maintain rates on existing Nevada Security Bank CDs. However, they reserve the right to reduce rates if they find "a specific rate to be above market pricing". I hope they take into consideration that CD rates that may seem excessive today could have been low for CDs opened in 2006 or 2007.
No credit unions were closed this week. The number of credit unions that have been liquidated this year remains at 9.
Below is a summary of today's bank failure:
83rd Bank Failure of 2010 (3rd in NV)
- FDIC Press Release
- Closed Bank: Nevada Security Bank, Reno, NV
- Size: 5 branches, $480.3 million in assets, $479.8 million in deposits
- Acquiring Bank: Umpqua Bank, Roseburg, OR
- Possible Uninsured Deposits: all deposit accounts, excluding the Cede & Co. brokered deposits, have been assumed by Umpqua Bank
- Rate Changes: It is Umpqua Bank’s intention to maintain the current rates on all deposits unless we find a specific rate to be above market pricing. Future rate changes may be made as the competitive market dictates (Umpqua Bank's FAQ)
- Estimated Cost to Deposit Insurance Fund: $80.9 million
- Enforcement Action: FDIC 6/29/09 C&D Order, FDIC 3/11/10 Prompt Correction Action
- Financial Ratings: 1 star (lowest) at Bankrate.com, 0 star (lowest) at BauerFinancial
The above Bankrate.com rating is based on 12/31/09 data. BauerFinancial rating is based on 3/31/10 data.