Time Ran Out for Millennium Bank

Just off the list at 49th, Millennium Bank, National Association of Sterling, Virginia, was closed today by the Office of the Comptroller of the Currency. The approximately $130.3 million in total asset bank was acquired by WashingtonFirst Bank (1018th) of Reston, Virginia. They also assumed $121.7 million in total deposits. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be a scant $7.7 million.

Also this week, 146th ranked Vantage Point Bank of Horsham, Pennsylvania, was closed today by state regulators. First Choice Bank (2624th) of Mercerville has acquired the $63.5 million in total assets and $62.5 million in total deposits of the former bank. The FDIC estimates that the cost to the DIF will be $8.5 million.

A Late Failure

Late last Friday, 82nd-ranked Syringa Bank of Boise, Idaho was closed by state regulators. The approximately $153.4 million in total assets and $145.1 million in total deposits bank has been acquired by Sunwest Bank of Irvine, California. The Bank Blog has estimated Syringa Bank's odds of failure within the year at 17.8%. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $4.5 million. 

Number One Fails

It comes as no surprise that The Bank of Union based in El Reno, Oklahoma was closed Friday by the Oklahoma State Banking Department. This relative newcomer to the Top 40 lists held the top ranking on our list of the nation's riskiest banks. The Bank of Union had approximately $331.4 million in total assets, of which BancFirst (943st) of Oklahoma City, Oklahoma has agreed to purchase approximately $225.5 million. In addition BancFirst will assume all of the approximately $328.8 million in total deposits of the failed bank. This is second bank closing of the year. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $70.0 million.

Author's Note: Our apologies for the delay in posting. Weather conditions in the northeast and a new canine have things slowed down.

First Failure of the New Year

In what is expected to be a more stable year in banking going forward, there are nonetheless some that are too risky to continue operating. Today, the twenty-seventh ranked bank on the list, DuPage National Bank of West Chicago, Illinois, was closed by regulators. Republic Bank (1633rd) of Chicago based in Oak Brook, Illinois has acquired the approximately $61.7 million in total assets and $59.6 million in total deposits of the former DuPage National Bank. Costs of the failure were minimal as the FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $1.6 million.

Bank Failures in 2013

In the years leading up to the Great Recession bank failures were almost unheard of.  Then, in 2008, 26 banks were seized with many (IndyMac and Washington Mutual) making headline news. It took until 2010 for the number of failures to peak at 157 and it has been coming down slowly ever since. Thankfully, this year has seen fewer banks shut down than in any year since, 24.

Most banks have always been safe. But the Top 40 continue to show some of the most dangerous banks still out there. Perhaps the best way of describing this level of risk is to look at our projections for the 40th ranked bank in recent years:

Fall 2013: Cornerstone Bank of Duluth, Ga. has about a 37% chance of closing in the next year.
Fall 2012: Golden State Bank of Upland, Ca. had about a 54% chance. Today it is 6.6% (still risky by banking standards)
Fall 2011: Idaho Banking Company of Boise, ID at 76% (now 29%)

As you can see, the overall level of risk has fallen. But risky banks tend to take years to recover, if they ever do. As such, The Bank Blog intends to keep making new quarterly lists for some time to come. As banks fail, we will provide recaps as well. However, there will no longer be weekly notes when there are no failures as that is now the majority of weeks.

The Bank Blog

Number Four Fails

For the first time in nearly two months, regulators decided to shut down a bank. Fourth-ranked Texas Community Bank, N.A. of The Woodlands, Texas, was closed today by the Office of the Comptroller of the Currency. Spirit of Texas Bank, SSB (4230th) of College Station, Texas, has agreed to acquire $147.9 million of the failed bank's approximately $160.1 million in total assets. In addition, they will assume $142.6 million in total deposits. The FDIC will retain the remaining assets for later disposition.The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $10.8 million.

No New Failures

As of 9:00 pm EST there have been no failures. The Bank Blog will be updated throughout the evening as new information arrives.