One small Maryland bank, Slavie Federal Savings Bank, was closed by the OCC on Friday. It was the first bank failure in Maryland since April 2012. The FDIC arranged for Bay Bank, FSB to assume all deposits.
When the spring season started, bank failures had become rare. Before May 16th there had been only one bank failure this spring and only six bank failures for the year. That changed on May 16th. A bank has failed on each of the last three Fridays.
The total number of bank failures for the year is now 9. Compared to last year, that’s still low this far into the year. At about this time last year there had been 14 bank failures, and for all of 2013 there had been 24 bank failures. If the current pace continues for 2014, there will be around 21 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.
This bank closure was typical in that 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 Bay Bank, FSB.
CD customers of Slavie Federal Savings Bank will have to wait to see what happens with their rates. According to Bay Bank’s FAQs:
We are in the process of evaluating the rates on our interest bearing deposit accounts. If your certificate of deposit rates are affected by this transition, you will receive a "Notice of Rate Changes to Interest Bearing Deposits" in the mail shortly advising you of any changes. Please read the document carefully.
You can withdraw some or all of your funds from your Certificates of Deposit without penalty until you enter a new agreement with Bay Bank, provided you are not using your deposits to secure a loan.
Below is the summary of the May 30th bank failure:
9th Bank Failure of 2014 (1st in Maryland)
- Closed Bank: Slavie Federal Savings Bank, Bel Air, MD
- FDIC Press Release
- Size: 2 branches, $140.1 million in assets and $111.1 million in deposits
- Acquiring Bank: Bay Bank, FSB, Lutherville, MD
- Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by Bay Bank, FSB (FDIC Q&A)
- Rate Changes: rates will be reviewed by Bay Bank, FSB and may be lowered (FDIC Q&A)
- Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, F & Texas Ratio of 246% at DepositAccounts.com (see financial rating note)
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 are based on March 31, 2013 data. Ratings at BauerFinancial and at Bankrate.com 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