Friday the 13th may actually be bad luck to some depositors. One of the two banks that were closed today didn’t have a buyer. Thus, the FDIC will only be paying depositors their insured deposits. Money over the FDIC limit could be lost.
With these two bank failures, the total number of bank failures for the year has increased to 22. As a comparison, at this time last year there had been 42 bank failures for the year.
The first bank that failed today was The Community's Bank in Bridgeport, CT. This was unusual in that the FDIC couldn’t find another bank to assume the deposits. So depositors will have to wait for the FDIC to send checks of their insured funds. The uninsured funds that are over the FDIC coverage limits may be lost. The FDIC didn’t disclose how many deposits were above the FDIC limit. According to the FDIC press release, “The amount of uninsured deposits will be determined once the FDIC obtains additional information from those customers.”
The second bank that failed today was First National Bank in Edinburg, TX. This was unusual in that it was a sizable bank with over $3 billion in assets. Most banks that failed this year have been small with under $1 billion in assets. All other aspects of this bank failure were common. The FDIC was able to find another bank to assume all deposits. The FDIC had the following message in its Q&As:
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 PlainsCapital Bank.
CD customers of First National Bank will have to wait to see what happens with their rates. The acquiring bank may reduce rates on the existing CDs. However, customers will be allowed to make a penalty-free early withdrawal.
No credit unions failed this week, but one did fail a few weeks ago. Since these two bank failures are the first bank failures since this credit union failed, I’ve included the summary of the closure below. The failed credit union was Craftsman Credit Union in Detroit, Michigan. That puts the total number of credit union liquidations for this year at 13.
Below is the summary of today’s bank failures and a recent credit union failure:
21st Bank Failure of 2013 (1st in Connecticut)
- Closed Bank: The Community's Bank, Bridgeport, CT
- FDIC Press Release
- Size: 2 branches, $26.3 million in assets and $25.7 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 (FDIC PR)
- Rate Changes: N/A
- Estimated Cost to Deposit Insurance Fund: $7.8 million
- Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, F & Texas Ratio of 1,013.49% at DepositAccounts.com (see financial rating note)
22nd Bank Failure of 2013 (1st in Texas)
- Closed Bank: First National Bank, Edinburg, TX
- FDIC Press Release
- Size: 51 branches, $3.1 billion in assets and $2.3 billion in deposits
- Acquiring Bank: PlainsCapital Bank, Dallas, TX
- Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by PlainsCapital Bank (FDIC Q&A)
- Rate Changes: First National Bank's rates wil be reviewed by PlainsCapital Bank and may be lowered (FDIC Q&A)
- Estimated Cost to Deposit Insurance Fund: $637.5 million
- Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, F & Texas Ratio of 195.35% at DepositAccounts.com (see financial rating note)
13th Credit Union Liquidation of 2013 (Sept 6)
- Liquidated CU: Craftsman Credit Union, Detroit, MI
- NCUA Press Release
- Size: 6,403 members and had assets of $24.1 million
- Acquiring CU: Security Credit Union, Flint, MI
Financial Ratings Notes: 0 star is lowest at BauerFinancial, 1 star is lowest at Bankrate.com and an F is lowest at DepositAccounts.com &, Texas Ratios over 100% is considered at risk. Ratings at DepositAccounts.com and BauerFinancial are based on June 30, 2013 data. Bankrate.com ratings are based on March 31, 2013 data.
- FDIC list of failed banks
- Texas Ratios for banks and credit unions
- Latest FDIC info on deposit insurance
- My bank failure review posts
- Review of the 2012 bank and credit union failures
- Review of the 2011 bank and credit union failures
- Review of the 2010 bank and credit union failures
- 10 Lessons from the 2008 bank failures