With the closure of Community South Bank in Tennessee becoming the second largest bank closure for 2013 and the addition shut down of Sunrise Bank of Arizona in Phoenix, the rate of bank failures continues to rise across the nation.
According the FDIC, the two new closures of Community South Bank and Sunrise Bank of Arizona will cost an estimated $89.5 million in costs to the Deposit Insurance Fund. Community South Bank based in Tennessee closed the doors its bank, making it the second largest failure for 2013.
Community South Bank, located in Parsons, Tennessee was estimated to hold over $380 million in assets as of June 30, 2013. The bank carried a more ‘community’ approach to its banking policies setting excellence in customer service as its number one goal. The failure saw the closure of 15 branches scattered amongst middle, eastern and western Tennessee. Though CB&S Bank has since agreed to absorb all of Community South Bank’s current deposits, it has chosen to purchase only $121.7 million in assets.
Sunrise Bank, located out of Phoenix Arizona was shut down by the Arizona Department of Financial Institutions with company assets estimated at $202 million dollars. In addition, the bank held over $190 million in deposits as of its latest report June 30, 2013. First Fidelity Bank NA located in Okalahoma City has agreed to take over all of the deposits as well as assets.
All of the current depositors of failed banks automatically become depositors for a new bank during closures such as these and the FDIC continues insurance up to $250,000 per depositor. The two new closures mark a new total of 20 bank closures for 2013 with several months left in the fiscal year. Total assets for the combined 20 are close to $2.8 billion and span nationwide.
The largest closure for 2013 so far came when Mountain National Bank of Tennessee closed its doors on June 7th, with over $430 million in reported assets. The bank held 12 locations at the time of closure which was transformed into First Tennessee bank and scheduled to reopen under new owners. The OCC released a statement at the June closing stating it was forced to shut the bank down due to unsafe practices concerning the handling of customers’ assets.
With 4 months left in the fiscal 2013 year the question remains if anymore of the nation’s banks will be closing their branch doors for the final time and just how high the failure total will go before ringing in the New Year.