After almost two months without a bank failure, one bank failed on Friday. Allendale County Bank, a small South Carolina bank, became the 6th bank of the year to fail. State regulators closed the bank, and the FDIC arranged for Palmetto State Bank to assume all deposits.
The pace of bank failures continue to decline. At this time last year there had been 10 bank failures. If the current pace continues for 2014, there will be only around 18 bank failures for the year. The frequency of bank failures has declined since 2010 when 157 banks failed. In good economic times, bank failures have been rare. For example, no banks failed in 2005 and 2006, and only 3 banks failed in 2007.
Friday’s bank closure was typical. The FDIC was able to find a buyer. Consequently, no one lost any money. According to the FDIC FAQs:
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 Palmetto State Bank.
CD customers of Allendale County Bank will have to wait to see what happens with their rates. Palmetto State Bank may reduce rates on the existing CDs. However, customers will be allowed to make a penalty-free early withdrawal.
The third and fourth credit union liquidation of 2014 took place in March. Parsons Pittsburg Credit Union in Kansas and Mayfair Federal Credit Union of Pennsylvania were liquidated. The NCUA was able to find credit unions to acquire all share deposits. The failed credit unions were small with assets around $14 million.
Below is the summary of Friday’s bank failure and last month’s credit union liquidations:
6th Bank Failure of 2014 (1st in South Carolina)
- Closed Bank: Allendale County Bank, Fairfax, SC
- FDIC Press Release
- Size: 5 branches, $54.5 million in assets and $51.0 million in deposits
- Acquiring Bank: Palmetto State Bank, Hampton, SC
- Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by Palmetto State Bank (FDIC Q&A)
- Rate Changes: Allendale County Bank’s rates will be reviewed by Palmetto State Bank and may be lowered (FDIC Q&A)
- Financial Ratings: 2 star at Bankrate.com, 0 star at BauerFinancial, C- at DepositAccounts.com (see financial rating note)
3rd Credit Union Liquidation of 2014 (March 21)
- Liquidated CU: Parsons Pittsburg Credit Union, Parsons, KS
- NCUA Press Release
- Size: 1,466 members and had assets of $13.4 million
- Acquiring CU: Golden Plains Credit Union of Garden City, KS
4th Credit Union Liquidation of 2014 (March 31)
- Liquidated CU: Mayfair Federal Credit Union, Philadelphia, PA
- NCUA Press Release
- Size: 1,519 members and had assets of $14.3 million
- Acquiring CU: Freedom Credit Union of Warminster, PA
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 are based on December 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 2013 bank and credit union failures
- 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