Failures

The economic tremors caused by the COVID-19 crisis led some analysts to argue that it was only a matter of time before some financial institutions collapsed. But thanks to government stimulus, the industry’s ample capital levels and moderate risk exposure, bank closings have become a rarity.

The $6.4 million-asset institution was placed in conservatorship in January and is the first credit union to be liquidated this year.

A federal watchdog agency determined that Almena State Bank's push into government-backed loans, supported with high-cost wholesale funding, set it up for collapse when significant credit issues arose.

Four former employees and several clients of Washington Federal Bank for Savings face charges of falsifying records to conceal the embezzlement of $31 million prior to the bank's December 2017 collapse.

Bansley & Kiener, without admitting wrongdoing, agreed to pay $2.5 million to address allegations that lax oversight contributed to the 2017 collapse of Washington Federal Bank for Savings.

A number of reasonable changes to the National Credit Union Share Insurance Fund could help NCUA avoid charging premiums.

Equity Bank agreed to buy most of the assets, and assume all the deposits, of Almena State Bank.

First City Bank of Florida had suffered “longstanding capital and asset quality issues” that were unrelated to the pandemic, the FDIC said.

The Justice Department alleges that the bankers worked with “higher-ranking bank officials” at Washington Federal Bank for Savings in Chicago to falsify records and hide funds before the bank's December 2017 collapse.

Ashton Ryan, the New Orleans bank's CEO, and two other officers are accused of disguising the financial condition of certain borrowers before the bank's 2017 collapse.

Backers say a bill to limit asset growth instead of restricting brokered funds addresses concerns about expanding balance sheets at troubled banks. But skeptics worry it would open the door to greater risk.

Randal Quarles, who is also chairman of the Financial Stability Board, said FSB members must do more to prepare for bank failures.

The industry was well positioned in terms of net worth before the pandemic and recession, but some institutions could run into issues with sluggish earnings and a surge in deposits.

Anita Gail Moody, who was president of Enloe State Bank, admitted to creating phony loan documents — and setting a fire to destroy them — before the bank was shuttered in May 2019.

The closure of IBEW Local Union 712 Federal Credit Union marks the first CU to shut its doors in the wake of the coronavirus.

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First State Bank, which the FDIC sold to MVB Financial, had struggled with profitability and capital levels for several years.

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An uptick in closings is likely, but how many institutions go under and how fast will depend on a variety of factors, including the duration of the pandemic.

The voluntary agreements were meant to help the FDIC make staffing changes ahead of a wave of retirements. But concerns about the coronavirus means those plans will be put on hold.