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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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One Small Missouri Bank is Closed by Regulators


One Small Missouri Bank is Closed by Regulators

Friday the 13th was bad luck for one small Missouri bank, Glasgow Savings Bank, which was closed by state regulators. The FDIC sold the bank to Regional Missouri Bank which assumed all of the failed bank's deposits.

This latest closure brings the number of bank failures for the year to 33. At this time last year, there had been 55 bank failures for the year, and at this time in 2010 there had been 96 bank failures.

This is the first bank failure of 2012 in Missouri. The state only had one bank failure in 2011, but it had 6 in 2010.

One interesting thing to note about this closure is that it had the smallest cost to the FDIC's Deposit Insurance Fund (DIF) that I've seen. The FDIC estimates that it cost the DIF only $100,000.

The FDIC arranged for Regional Missouri Bank to assume all deposits, even deposits over the FDIC limit. The FDIC's Q&As for this bank had the message: "no one lost any money on deposit as a result of the closure of this bank".

Regional Missouri Bank did not have any news on its website regarding what will happen to CD rates at Glasgow Savings Bank. The FDIC gave its typical paragraph on interest rates in its Q&As:

Interest on deposits accrued through close of business on Friday, July 13, 2012, will be paid at your same rate. Glasgow Savings Bank's rates will be reviewed by the new bank and may be lowered; however, you will be notified in writing of any changes. You may withdraw funds from any transferred account, regardless of whether your interest rate changes, without early withdrawal penalty until you enter into a new deposit agreement with the new bank.

There were no credit union liquidations this week, at least of the regular type. Last Saturday the NCUA issued a press release announcing the liquidation of the corporate credit union, Western Bridge Corporate Federal Credit Union. Corporate credit unions only serve other credit unions. Western Corporate and four other corporate credit unions were seized by the NCUA in 2009 and 2010 after they had big losses on the mortgage-backed securities.

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.

Below is the summary of today's bank failure:

33rd Bank Failure of 2012 (1st in Missouri)

  • Closed Bank: Glasgow Savings Bank, Glasgow, MO
  • FDIC Press Release
  • Size: 1 branch, $24.8 million in assets and $24.2 million in deposits
  • Acquiring Bank: Regional Missouri Bank, Marceline, MO
  • Possible Uninsured Deposits: all deposit accounts has been assumed by Regional Missouri Bank (FDIC Q&A)
  • Rate Changes: Glasgow Savings Bank's rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $0.1 million
  • Enforcement Action: FDIC 5/26/10 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 214.22% at DepositAccounts.com (see financial rating note)

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.


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Anonymous   |     |   Comment #1
Although I was not invested in this bank, it does bring to mind an FDIC insurance coverage question. If accounts are held as follows in a single bank, are all of the accounts covered by FDIC insurance?

$250,000 account in husbands name with wife as POD

$250,000 account in wifes name with husband as POD

$250,000 IRA account in husbands name with wife as beneficiary

$500,000 in husband and wife joint account(s)

As I understand, all of the accounts would be FDIC insurance covered. Am I correct in my thinking? TIA for any and all comments but please go easy. :-)


Anonymous   |     |   Comment #2
Here's a link to the FDIC's insurance calculator EDDIE.  I works greate.

Anonymous   |     |   Comment #4
#2 - Thanks much for the link, I had totally forgotten it. I ran the numbers and all is well. Again, I appreciate your help.



Kaight   |     |   Comment #3
It's pretty pathetic that they only closed one small bank given how many are in trouble and need to be deep sixed.  But the pressure for closures is off.  The government controls interest rates being paid by troubled banks.  That keeps us savers from having a chance for a decent return and it protects the government from having to do the right, responsible thing.  We might as well be living in Red China or in the old Soviet Union.  Let freedom ring?  BS on that in the USA in 2012.
Anonymous   |     |   Comment #5
I live a fairly short distance from the Glasgow Savings Bank(former bank) and it was a historically conservatively ran instituton. Located in a very small Missouri River town, and primarily farming community, it was typical of what you might visualize of any small town bank. Quite a surprise to see it added to the closed list so surely there must be many, many others in as bad, or worse, condition.  It was obviously 'not to big' to fail.
ERB   |     |   Comment #6
Their website says that they are the oldest bank in Missouri and the preferred bank of many of the area's pioneer families (http://www.glasgowsavingsbank.com/home/aboutus): the modern realities do not respect pedigree or tenure.