Weekend Economists Celebrate September 13-15, 2013

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1. In Honor of Lehman's, we have two banks failed

The Federal Deposit Insurance Corporation (FDIC) approved the payout of the insured deposits of The Community's Bank, Bridgeport, Connecticut. The bank was closed today by the Connecticut Department of Banking, which appointed the FDIC as receiver.

The FDIC was unable to find another financial institution to take over the banking operations of The Community's Bank. The FDIC will mail checks directly to depositors of The Community's Bank for the amount of their insured money. As a convenience to depositors, the FDIC has made arrangements with People's United Bank, Bridgeport, CT, to accept the failed bank's direct deposits from the federal government, such as Social Security and Veterans' payments for 90 days. The two People's United Bank locations designated to service The Community's Bank's customers receiving federal government direct deposit payments are as follows: 4531 Main Street, Bridgeport, CT – located inside the Brookside Stop and Shop Supermarket, and 58 Boston Avenue, Bridgeport, CT....

As of June 30, 2013, The Community's Bank had approximately $26.3 million in total assets and $25.7 million in total deposits. The amount of uninsured deposits will be determined once the FDIC obtains additional information from those customers.

The FDIC as receiver will retain all the assets from The Community's Bank for later disposition. Loan customers should continue to make their payments as usual.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $7.8 million. The Community's Bank is the 21st FDIC-insured institution to fail in the nation this year, and the first in Connecticut. The last FDIC-insured institution closed in the state was Connecticut Bank of Commerce, Stamford, on June, 26, 2002.




First National Bank, Edinburg, Texas, was closed today by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with PlainsCapital Bank, Dallas, Texas, to assume all of the deposits of First National Bank.

The 51 former branches of First National Bank will reopen as branches of PlainsCapital Bank during their normal business hours, including the two branches in El Paso doing business as The National Bank of El Paso. Depositors of First National Bank will automatically become depositors of PlainsCapital Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of First National Bank should continue to use their current branch until they receive notice from PlainsCapital Bank that systems conversions have been completed to allow full-service banking at all branches of PlainsCapital Bank.

Depositors of First National Bank can continue to access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of June 30, 2013, First National Bank had approximately $3.1 billion in total assets and $2.3 billion in total deposits. In addition to assuming all of the deposits of First National Bank, PlainsCapital Bank agreed to purchase approximately $2.7 billion of First National Bank's assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and PlainsCapital Bank entered into a loss-share transaction on $1.8 billion of First National Bank's assets....
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $637.5 million. Compared to other alternatives, PlainsCapital Bank's acquisition was the least costly resolution for the FDIC's DIF. First National Bank is the 22nd FDIC-insured institution to fail in the nation this year, and the first in Texas. The last FDIC-insured institution closed in the state was First International Bank, Plano, on September 30, 2011.