After last Friday's 5 bank failures, this Friday was quiet by comparison with only one bank failure. Jasper Banking Company located in North Georgia was closed by regulators, and the FDIC arranged for it to be purchased by Stearns Bank N.A. of Minnesota. That brings the number of bank failures for the year to 39. At this time last year there had been 61 bank failures, and at this time in 2010 there had been 108 bank failures.
Georgia increases its lead as the state with the most 2012 bank failures. The total is now up to 9. Second place is a tie between Illinois and Florida with 5 bank failures each for the year.
Jasper Banking Company was small with only 3 branches and $216.7 million in assets. The Atlanta Journal-Constitution has an article about the failure, and describes the problems the bank experienced:
The bank, heavily tied to commercial real estate and real estate development loans, tried to pull back but succumbed to borrowers who could no longer pay. The region also has been hard hit by collapses of competing banks and the glut of foreclosed property that has hurt real estate sales and property values.
Stearns Bank N.A. assumed all deposits of Jasper Banking Company. The FDIC has the following message at its Q&A page:
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 Stearns Bank N.A.
Stearns Bank N.A. provided a Q&A on its website which has some additional information over what the FDIC provided. It included some information for CD customers of the failed bank:
Q: Will I continue to earn interest at the same rate?
A: If you had a certificate of deposit (CD) with Jasper Banking Company, Stearns Bank will send you a letter by August 3, 2012 advising you what it plans to do with current interest rates. You may withdraw funds from any CD without early withdrawal penalty until you enter into a new deposit agreement.
Unfortunately, Stearns Bank N.A. is allowed to reset the CD rates starting the day after the closure even though it doesn't have to communicate the new CD rates until later.
Credit Union Conservatorship
There were no credit union liquidations this week. The number of retail credit union liquidations for the year remains at 7. The last 2 closures took place on May 31st and June 1st.
However, there was one credit union that was placed into conservatorship by the NCUA. It's Trinity Credit Union, a very small credit union with only 1,100 members and $4 million in assets. In a conservatorship, the NCUA takes control of the credit union with the intent to bring the credit union back into safe and sound operation. There's no effect to uninsured deposits, but the credit union remains at risk of liquidation if the NCUA is unable to correct the issues. Trinity Credit Union is the fourth credit union placed into conservatorship this year.
Below is the summary of today's bank failure and credit union conservatorship:39th Bank Failure of 2012 (9th in Georgia)
- Closed Bank: Jasper Banking Company, Jasper, GA
- FDIC Press Release
- Size: 3 branches, $216.7 million in assets and $213.1 million in deposits
- Acquiring Bank: Stearns Bank National Association, St. Cloud, MN
- Possible Uninsured Deposits: all deposit accounts, excluding the Cede & Co. deposits, have been assumed by Stearns Bank N.A. (FDIC Q&A)
- Rate Changes: Jasper Banking Company’s rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
- Estimated Cost to Deposit Insurance Fund: $58.1 million
- Enforcement Action: None
- Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 659.96% at DepositAccounts.com (see financial rating note)
4th Credit Union Placed into Conservatorship in 2012 (July 27)
- Conserved CU: Trinity Credit Union, Trinidad, Colorado
- NCUA Press Release
- Size: 1,100 members and $4 million in assets
Financial Ratings Notes: 0 star is lowest at BauerFinancial, 1 star is lowest at DepositAccounts.com & Bankrate.com, Texas Ratios over 100% is considered at risk. Ratings at DepositAccounts.com and BauerFinancial are based on March 2012 data. Ratings at Bankrate.com are based on December 2011 data.