New South Federal Savings Bank, Irondale, Alabama is the 137th FDIC-insured institution to fail in the nation this year, and the agency estimates that the cost to the Deposit Insurance Fund (DIF) will be $212.3 million.
New South Federal Savings Bank, Irondale, Alabama, was closed today by the Office of Thrift Supervision, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Beal Bank, Plano, Texas, to assume all of the deposits of New South Federal Savings Bank.
The sole branch of New South Federal Savings Bank will reopen on Monday as a branch of Beal Bank. Depositors of New South Federal Savings Bank will automatically become depositors of Beal Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use their existing branch until they receive notice from Beal Bank that it has completed systems changes to allow other Beal Bank branches to process their accounts as well.
This evening and over the weekend, depositors of New South Federal Savings 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 September 30, 2009, New South Federal Savings Bank had approximately $1.5 billion in total assets and $1.2 billion in total deposits. Beal Bank did not pay the FDIC a premium for the deposits of New South Federal Savings Bank. In addition to assuming all of the deposits of the failed bank, Beal Bank agreed to purchase essentially all of the failed bank’s assets.
The FDIC and Beal Bank entered into a loss-share transaction on $1.2 billion of New South Federal Savings Bank’s assets. Beal Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.
Customers who have questions about today’s transaction can call the FDIC toll-free at 1-800-423-6395. The phone number will be operational this evening until 9:00 p.m., Central Standard Time (CST); on Saturday from 9:00 a.m. to 6:00 p.m., CST; on Sunday from noon to 6:00 p.m., CST; and thereafter from 8:00 a.m. to 8:00 p.m., CST. Due to the Christmas Holiday, the toll-free number will not be operational between the hours of 3 p.m., Thursday, December 24, and 8:00 a.m., Monday, December 28. At that time the toll-free number will resume its normal hours.
Customers who would like more information on today’s transaction should visit the FDIC’s Web site for New South Federal Savings Bank.