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Third Bank Failure of 2015 - Capitol City Bank & Trust Company in Georgia

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Third Bank Failure of 2015 - Capitol City Bank & Trust Company in Georgia

Capitol City Bank & Trust Company of Atlanta, Georgia was closed by state regulators on Friday marking the third bank failure of 2015. It was the first bank failure of the year in Georgia. Since the financial crisis began in 2008 there have been 89 bank failures in Georgia, the most of any state.

The closure of Capitol City Bank & Trust Company was typical in that the FDIC was able to find a buyer. The FDIC arranged for First-Citizens Bank & Trust Company, Raleigh, North Carolina to assume all of the deposits and to purchase essentially all of the assets of the failed bank. Consequently, no depositor lost any money. According to the FDIC’s Q&A:

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 First-Citizens Bank & Trust Company.

CD customers of Capitol City Bank will have to wait to see what happens with their rates. According to the FDIC’s Q&A:

Interest on deposits accrued through close of business on February 13, 2015, will be paid at your same rate. Capitol City Bank & Trust Company’s rates will be reviewed by First-Citizens Bank & Trust Company and may be lowered; however, you will be notified in writing of any changes. You may withdraw funds from any transferred account, regardless of whether your interest rate changes, without early withdrawal penalty until you enter into a new deposit agreement with First-Citizens Bank & Trust Company.

Last year 18 banks failed with only one failure in Georgia. The number of bank failures has been declining since 2010 when 157 banks failed. That was the year of the most bank failures since the financial crisis of 2008. For more details, please refer to my review of the 2014 bank and credit union failures.

There has also been a recent credit union failure. This occurred on January 30 when the NCUA closed American Bakery Workers Federal Credit Union of Philadelphia. This was a small credit union with only 1,457 members and $4.2 million in assets. The NCUA arranged for TruMark Financial Credit Union of Trevose, Pennsylvania to assumed American Bakery Workers’ members, deposits and a majority of the loan portfolio. There were 12 credit union liquidations in 2014.

Below is the summary of the Friday bank failure and recent credit union liquidation:

3rd Bank Failure of 2015 (1st in Georgia) (February 13)

  • Closed Bank: Capitol City Bank & Trust Company, Atlanta, Georgia
  • FDIC Press Release
  • Size: 8 branches, $272.3 million in assets and $262.7 million in deposits
  • Acquiring Bank: First-Citizens Bank & Trust Company, Raleigh, North Carolina
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by First-Citizens Bank & Trust Company (FDIC Q&A)
  • Rate Changes: rates will be reviewed by First-Citizens Bank & Trust Company and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $88.9 million
  • Financial Ratings: 1 star at Bankrate.com, 0 stars at BauerFinancial, F & Texas Ratio of 520% at DepositAccounts.com (see financial rating note)

1st Credit Union Liquidation of 2015 (January 30)

  • Liquidated CU: American Bakery Workers Federal Credit Union of Philadelphia, PA
  • NCUA Press Release
  • Size: assets of approximately $4.2 million and served 1,457 members
  • Acquiring CU: TruMark Financial Credit Union of Trevose, 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 at DepositAccounts.com Bankrate.com and BauerFinancial are based on September 30, 2014 data.

References:

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Comments
peacejogger
peacejogger   |     |   Comment #1
Georgia has 159 counties and each one thinks they need their own local government and a many banks as they can get to move in.  It is a hodgepodge of interests and with lax regulations it was always a disaster in the making.  I was not surprised that Georgia was at the top of the list of bank failures during the last few years.  Might even have been a good thing for the state that so many banks have disappeared.