There was only one bank failure this Friday, but it was an interesting one. NOVA Bank in Pennsylvania was closed by state regulators. The FDIC was unable to find a buyer, so the FDIC will be mailing checks to NOVA Bank depositors for the amount of their insured money. Those with uninsured deposits may have a loss.
This is the 47th bank failure of the year, and it's only the 4th this year which did not have a buyer. At this time last year there had been 85 bank failures.
For some past cases in which the FDIC couldn't find a buyer, the FDIC has given checking account customers time to open accounts at other insured institutions before they close the checking accounts and mail the checks. That didn't happen this time, but the FDIC is providing some help to customers who receive government direct deposit. According to the FDIC press release:
As a convenience to depositors, the FDIC has made arrangements with National Penn Bank to accept the failed bank's direct deposits from the federal government, such as Social Security and Veterans' payments through January 25, 2013.
My last report of NOVA Bank was in December 2008 when it was offering a CD special that was available nationwide via an online application. That may be one reason the FDIC wasn't able to find a buyer. Too many of NOVA Bank deposits may have been held by out-of-state CD customers who would be unlikely to build additional relations with a new bank.
There were no credit union liquidations this week. The total number of credit union failures remain at 10. One of those 10 was privately insured by the ASI.
Below is the summary of today's bank failure:
47th Bank Failure of 2012 (2nd in Pennsylvania)
- Closed Bank: NOVA Bank, Berwyn, PA
- FDIC Press Release
- Size: 13 branches, $483.0 million in assets and $432.2 million in deposits
- Acquiring Bank: None
- Possible Uninsured Deposits: The amount of uninsured deposits will be determined once the FDIC obtains additional information from those customers
- Rate Changes: The FDIC will mail checks directly to depositors of NOVA Bank for the amount of their insured money
- Estimated Cost to Deposit Insurance Fund: $91.2 million
- Enforcement Action: FDIC 5/7/10 Consent Order
- Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 315.63% 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 are based on June 30, 2012 data.