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Update on 2015 Bank and Credit Union Failures

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Update on 2015 Bank and Credit Union Failures

After two months without any closures, a bank and a credit union were closed by regulators on Friday. It’s now common to go through a month without a bank failure. Back in 2010 at the peak of bank failures, there were months with over a dozen bank failures.

The bank that failed on Friday was Premier Bank in Denver, Colorado. For the year, this was the sixth bank failure in the U.S. and the first in Colorado. Colorado regulators closed Premier Bank, and the FDIC arranged for United Fidelity Bank, fsb, Evansville, Indiana, to assume all of the deposits. 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 United Fidelity Bank, fsb.

CD customers of Premier 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 July 10, 2015, will be paid at your same rate. Premier Bank’s rates will be reviewed by the new bank 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 the new bank.

The Denver Post has some interesting information on Premier Bank’s history:

The bank has been in trouble since at least 2007, when Small Business Administration loans accounted for 90 percent of its loan portfolio and it was slapped with a cease and desist order by state and federal regulators.

It was started in 1996 as Colorado's first Asian-American bank.

The credit union that failed on Friday was Trailblazer Federal Credit Union of Washington, Pennsylvania. This was the fourth credit union liquidation of 2015. It was a very small credit union with only 1,535 members and $4.1 million in assets. The NCUA arranged for Chrome Federal Credit Union of Washington, Pennsylvania to assume Trailblazer’s members and deposits.

Below is the summary of the Friday’s bank and credit union failures:

6th Bank Failure of 2015 (1st in Colorado) (July 10)

  • Closed Bank: Premier Bank, Denver, CO
  • FDIC Press Release
  • Size: 2 branches, $31.7 million in assets and $29.6 million in deposits
  • Acquiring Bank: United Fidelity Bank, fsb, Evansville, IN
  • Possible Uninsured Deposits: all deposit accounts, including brokered deposits, have been assumed by United Fidelity Bank, fsb (FDIC Q&A)
  • Rate Changes: rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $4.4 million
  • Financial Ratings: 1 star at Bankrate.com, ? stars at BauerFinancial, F & Texas Ratio of 30.87% at DepositAccounts.com (see financial rating note)

4th Credit Union Liquidation of 2015 (July 10)

  • Liquidated CU: Trailblazer Federal Credit Union of Washington, PA
  • NCUA Press Release
  • Size: assets of approximately $4.1 million and served 1,535 members
  • Acquiring CU: Chrome Federal Credit Union of Washington, 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 March 31, 2015 data.

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