First Kentucky bank to fail since 2009
LEXINGTON, Ky. (April 19, 2013) — First Federal Bank, with locations in Lexington and Georgetown, 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 Your Community Bank, New Albany, Ind., to assume all of the deposits of First Federal Bank.
The five branches of First Federal Bank will reopen during their normal business hours beginning Saturday as branches of Your Community Bank. Depositors of First Federal Bank will automatically become depositors of Your Community 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 Federal Bank should continue to use their existing branch until they receive notice from Your Community Bank that it has completed systems changes to allow other Your Community Bank branches to process their accounts as well.
Community Bank Shares, the holding company of Your Community Bank, is “excited to welcome the customers of First Federal Bank to our family,” said James Rickard, president and chief executive officer of Community Bank Shares. “Our goal is to provide exceptional service at every customer touch-point and work diligently to consistently deliver that service expectation to our new clients in Lexington and Georgetown, Ky.”
“We also want to reassure all customers of First Federal Bank that heir deposits are safe and accessible using their existing account numbers, checks, ATM/debit cards, and online banking login,” he said. “In time, deposit accounts will be converted to Your Community Bank’s deposit account platform and customers will be able to take advantage of the full-suite of technology offerings including mobile, text, and online banking at their individual discretion.”
Friday night and over the weekend, depositors of First Federal Bank can 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 Dec. 31, First Federal Bank had approximately $100.1 million in total assets and $93.9 million in total deposits. In addition to assuming all of the deposits of the failed bank, Your Community Bank agreed to purchase essentially all of the assets.
Customers with questions about today’s transaction can call the FDIC toll-free at 1-800-355-0650. The phone number will be operational until 9 p.m. (EDT) Friday; on Saturday from 9 a.m. to 6 p.m. EDT; on Sunday from noon to 6 p.m.; on Monday from 8 a.m. to 8 p.m.; and thereafter from 9 a.m. to 5 p.m. Interested parties also can visit the FDIC’s website.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $9.7 million. Compared to other alternatives, Your Community Bank’s acquisition was the least costly resolution for the FDIC’s DIF. First Federal Bank is the sixth FDIC-insured institution to fail in the nation this year, and the first in Kentucky. The last FDIC-insured institution closed in the state was Irwin Union Bank, FSB, Louisville, on Sept. 18, 2009.