WASHINGTON–In what had been a relatively quiet year for bank failures, a rash of bank closures were announced recently.
The FDIC announced a fourth bank has been shuttered in 2019, with three of those closures announced in just a little more than a week. However, the overall number of closures in 2019 remains small.
The most recent bank to be closed was the $120-million City National Bank of New Jersey. According to the FDIC and the OCC, the bank’s deposits are being assumed by Industrial Bank of Washington, D.C. The overall cost of the failure to the bank insurance fund is $2.5-million, according to the agency.
The FDIC announced earlier closures that included the $27.1-million Resolute Bank in Maumee, Ohio, and the $29.7-million Louisa Community Bank in Louisa, Ky. The combined cost of the two bank failures to insurance fund was $6.7 million, the FDIC said.
The closures were the first to be announced in months by the FDIC, which in May said it had taken control of the $37-million Enloe State Bank in Cooper, Texas, at a cost of $27.6 million. In that case, insider fraud was cited by the FDIC as the reason for the failure.
Slower Pace Than CUs
Banks have been closing at a far slower pace than credit unions. When Enloe State Bank was closed it was the first such failure announced by the FDIC in 18 months. During 2018, there were no bank failures.
“The overall health of the banking system today remains strong, as reported in the FDIC’s most recent Quarterly Banking Profile,” the FDIC said in a released statement. “On average, there are five bank failures each year in non-crisis times, according to FDIC data. There have been only three years since 1933 without a single bank failure.”