I missed this bank failure last Friday. AztecAmerica Bank in Illinois was closed last Friday. It was the seventh bank to fail in the nation this year. State regulators closed the bank, and the FDIC arranged for Republic Bank of Chicago to assume all deposits.
Banks are failing so infrequently that it’s easy to overlook a closure. The pace of bank failures continue to decline. At this time last year there had been 13 bank failures. If the current pace continues for 2014, there will be only around 17 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. 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 Republic Bank of Chicago.
CD customers of AztecAmerica Bank will have to wait to see what happens with their rates. Here’s an excerpt from Republic Bank of Chicago’s FAQs:
Will I continue to earn interest at the same rate? Will I be charged an early withdrawal penalty?
RBC will be reviewing rates and will notify you. You may withdraw funds from any transferred account without an early penalty until you enter into a new deposit agreement with your new bank, unless the deposits are pledged as collateral for loans. Entering into a new deposit agreement can be done by either renewing your CD or making a deposit to, or a withdrawal from, your account.
No credit unions have been liquidated since March. However, one credit union, Health One in Michigan, was recently placed into conservatorship by the NCUA (see NCUA press release).
Below is the summary of the May 16th bank failure:
7th Bank Failure of 2014 (2nd in Illinois)
- Closed Bank: AztecAmerica Bank, Berwyn, IL
- FDIC Press Release
- Size: 2 branches, $66.3 million in assets and $65.0 million in deposits
- Acquiring Bank: Republic Bank of Chicago, Oak Brook, IL
- Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by Republic Bank of Chicago (FDIC Q&A)
- Rate Changes: AztecAmerica Bank’s rates will be reviewed by Republic Bank of Chicago and may be lowered (FDIC Q&A)
- Financial Ratings: 1 star at Bankrate.com, ? star at BauerFinancial, F 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 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