Four U.S. Banks Fail Friday

California Bank & Trust also acquired $1.8 billion in assets from the FDIC receivership. The FDIC agreed to share in losses on $1.5 billion of the acquired assets. Vineyard's 16 offices will reopen Monday as California Bank & Trust branches. The FDIC estimated the cost to its deposit insurance fund would be $579 million.

Temecula Valley Bank

Temecula Valley Bank was assigned an E-minus financial strength rating by TheStreet.com Ratings in March, a downgrade from the D rating that had been assigned in June 2008. The bank's nonperforming assets ratio was 11.73% and it was undercapitalized, with a Tier 1 leverage ratio of 3.99% and a total risk-based capital ratio of 5.44% as of March 31.

The failed bank had $1.5 billion in total assets and $1.3 billion in deposits. First Citizens Bank & Trust agreed to purchase all of the failed bank's deposits, save $304 million in brokered CDs.

First Citizens also acquired nearly all of Temecula Valley Bank's assets, with the FDIC agreeing to share in losses. Temecula Valley's 11 offices were scheduled to reopen Monday as branches of First Citizens.

Free Financial Strength Ratings

Although depositors suffered no losses in the four bank failures on Friday, there have been five instances this year when a bank failed and the FDIC was unable to find another institution to acquire its deposits. Depositors with total balances exceeding FDIC insurance limits lost money in four of those failures.

Even if your personal deposits are under FDIC insurance limits, you or someone you know are probably associated with a business, organization or government entity (such as a school district) with large deposits of somebody else's money in a local bank. In this environment, it is a very good idea to look into the health of your bank.

For depositors shopping for high-rate CDs through brokers, it is also important to consider the health of a bank or thrift, because attractive CD rates can be lost when an institution fails. Customers of Vineyard Bank and Temecula Valley Bank with CD deposits made through brokers are facing this inconvenient scenario and will probably have to wait a few weeks to receive their money from their brokers.

TheStreet.com Ratings issues independent and very conservative financial strength ratings on each of the nation's 8,500 banks and savings and loans. They are available at no charge on the Banks & Thrifts Screener. In addition, the Financial Strength Ratings for 4,000 life, health, annuity, and property/casualty insurers are available on the Insurers & HMOs Screener.

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