The Federal Deposit Insurance Corp. or FDIC, announced Friday the shuttering of two banks, one each in Tennessee and Arizona, taking the count of total U.S. bank closures in 2013 to twenty, after 51 in 2012, 92 in 2011 and the 157 bank closures in 2010.
It is the second FDIC-insured institution to fail in Tennessee and the third in Arizona this year.
The two banks were closed on Friday by the regulators, with the assets of the failed banks beings assumed by other banks in FDIC assisted transactions. The FDIC estimates that the cost to the Deposit Insurance Fund or DIF, by the two bank closures will be a total of $89.5 million.
Parsons, Tennessee-based Community South Bank was closed by the Tennessee Department of Financial Institutions on Friday. As of June 30, 2013, the bank had about $386.9 million in total assets and $377.7 million in total deposits.
Russellville, Alabama-based CB&S Bank acquired the banking operations, including all the deposits, of Community South Bank, from the FDIC. However, CB&S Bank agreed to purchase only about $121.7 million of Community South Bank's assets, with the remaining assets being retained by the FDIC for later disposition.
Meanwhile, Phoenix, Arizona-based Sunrise Bank of Arizona was closed by the Arizona Department of Financial Institutions. As of June 30, 2013, the bank had $196.9 million in total deposits and about $202.2 million in total assets.
Oklahoma City, Oklahoma First Fidelity Bank N.A. agreed to purchase essentially all of Sunrise Bank's assets, while assuming all of the deposits of the failed bank.
The FDIC noted that all customers of the 15 branches of Community South Bank and six branches of Sunrise Bank can this evening and over the weekend access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed, and loan customers should continue to make their payments as usual.
Depositors of the failed banks will automatically become depositors of the new banks and deposits will continue to be insured by the FDIC.
Customers of failed banks are protected, by the FDIC, which has insured bank deposits since the Great Depression, currently covering customer accounts up to $250,000. The FDIC insures deposits at the nation's 7,019 banks and savings associations.
Banks failures have continued at a relatively slow pace in 2013, with the size and number of closures being well below levels seen during the prior three years. At the same time last year, 40 banks had failed.
On an average, just over 4 banks have failed per month in 2012, with bank closures for 2011 averaging eight per month, and thirteen in 2010.
The 51 bank closures in 2012 were sharply down from 92 in 2011, the peak of 157 in 2010 in the wake of the financial crisis, and 140 in 2009, but were double the 25 bank failures in 2008. Meanwhile, only three banks failed in 2007, and a total of 23 in the six years prior to that. The highest and all time record for bank closures was in 1989 when 534 banks closed, followed by 181 bank failures in 1992.
by RTT Staff Writer
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