A small Illinois bank was closed by state regulators on Friday bringing the yearly total of bank failures to six. We have now had more bank failures this year than in the entire year of 2016 when only five banks failed. If this pace of bank failures continue, we will likely see more bank failures this year than in 2015 when eight banks failed.
The failed institution, Fayette County Bank of Saint Elmo, Illinois, had only one branch and $34.4 million in assets. This is the most common type of bank that has failed in the last few years. Failures of banks with over a billion dollar in assets have been much less common in the last few years even though the last two failed banks were this size.
Another aspect of Friday’s bank failure that was typical is that the FDIC arranged for another bank to assume all deposits. All deposits, even those above the FDIC limits, were transferred to the new bank as described in the FDIC’s 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 United Fidelity Bank.
As is typical, the only concern for depositors of the failed bank are those with CDs that had high rates. Those high rates may not last as the FDIC describes in its FAQs:
Interest on deposits accrued through close of business on Friday, May 26, 2017, will be paid at your same rate. Fayette County Bank’s rates will be reviewed by United Fidelity 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 United Fidelity Bank.
No other bank or credit union has failed since my bank failure post from May 7th. Below is the summary of the failed Fayette County Bank:
6th Bank Failure of 2017 (2nd in Illinois) (May 26)
- Closed Bank: Fayette County Bank, Saint Elmo, Illinois
- FDIC Press Release
- Size: 1 branch, $34.4 million in assets and $34.0 million in deposits
- Acquiring Bank: United Fidelity Bank, fsb, Evansville, Indiana
- Possible Uninsured Deposits: all sflimoexpress.net, including brokered deposits, have been assumed by United Fidelity Bank. (FDIC Q&A)
- Rate Changes: Fayette County Bank’s rates will be reviewed by United Fidelity Bank and may be lowered (FDIC Q&A)
- Estimated Cost to Deposit Insurance Fund: $10.0 million
- Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, F & Texas Ratio of 248% at EpBooks.us (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 EpBooks.us, Texas Ratios over 100% is considered at risk. Ratings at EpBooks.us and BauerFinancia are based on March 31, 2017 data. Ratings at Bankrate.com are based on March 31, 2016 data.
- FDIC list of failed banks
- NCUA list of failed and conserved credit unions
- Evaluate the Financial Health of Your Bank or Credit Union
- Latest FDIC info on deposit insurance
- My bank failure review posts
- Review of the 2016 bank and credit union failures
- Review of the 2015 bank and credit union failures
- Review of the 2014 bank and credit union failures
- 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