Two banks failed this Friday. The first was Polk County Bank in Iowa, and the second was Central Progressive Bank in Louisiana. Both were the first 2011 bank failure in their state. The total number of banks that have failed this year in the U.S. is now up to 90. At this time last year there had been 149 bank failures for 2010.
The FDIC arranged for Grinnell State Bank to acquire Polk County Bank and First NBC Bank to acquire Central Progressive Bank. The acquiring banks assumed all deposit accounts, including brokered deposits. Thus, no depositors will lose any money even if they had deposits over the FDIC limit.
Even though the depositors of the failed banks won't have to worry about losing any money, they will have to worry about losing their interest rates. First NBC Bank included an FAQ page on its website which warned Central Progressive Bank customers that they may see lower rates:
We are in the process of evaluating the rates on our interest bearing deposit accounts. If your certificate of deposit rates are affected by a rate change as of November 18, 2011 you will receive a “Notice of Rate Changes to Interest Bearing Deposits” in the mail advising you of any changes. Please read the document carefully.
This was another week that there were no credit union liquidations or credit unions placed into NCUA conservatorship. So far this year there have been 12 credit union liquidations and 11 credit unions that have been placed into conservatorships.
Below is the summary of Friday's bank failures.
89th Bank Failure of 2011 (1st in Iowa)
- FDIC Press Release
- Closed Bank: Polk County Bank, Johnston, IA
- Size: 3 branches, $91.6 million in assets and $82.0 million in deposits
- Acquiring Bank: Grinnell State Bank, Grinnell, IA
- Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by Grinnell State Bank
- Rate Changes: Polk County Bank’s rates will be reviewed by the new bank and may be lowered (FDIC Q&As)
- Estimated Cost to Deposit Insurance Fund: $12.0 million
- Enforcement Action: FDIC 10/27/08 C&D Order
- Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 403.89% at DepositAccounts.com (see financial rating note)
- FDIC Press Release
- Closed Bank: Central Progressive Bank, Lacombe, LA
- Size: 17 branches, $383.1 million in assets and $347.7 million in deposits
- Acquiring Bank: First NBC Bank, New Orleans, LA
- Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by First NBC Bank
- Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC Q&As)
- Estimated Cost to Deposit Insurance Fund: $58.1 million
- Enforcement Action: FDIC 1/28/09 C&D Order, FDIC 7/25/11 PCA
- Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 281.70% at DepositAccounts.com (see financial rating note)