July 9, 2010- Ideal Federal Savings Bank, Baltimore, Maryland, was closed today by the Office of Thrift Supervision, which appointed the FDIC as receiver.
The FDIC, as receiver, could not find a buyer for this tiny one branch bank with only $6.3 million in assets and $5.8 million in deposits. Accordingly, the FDIC will payoff the depositors of Ideal Federal and liquidate the bank.
Customers of Ideal Federal will not have access to their accounts until Monday and have until July 24 to claim their deposits. After July 24th, remaining funds will be mailed to depositors of record. Since the FDIC could not find another banking institution to assume the deposits of failed Ideal, depositors will only be reimbursed up to the insured deposit limit of $250,000. Depositors with funds in excess of the insurance limits may recover a portion of their funds depending on the ultimate recoverable value of Ideal’s assets.
Ideal Federal had been under regulatory orders to raise additional capital since a cease and desist order was issued by regulators in August 2008. Ideal has a long history since it was founded in 1920 and was one of the few remaining black-owned banks in Maryland. The bank only had around 1,000 customers and two employees and did not offer basic services such as credit cards or an ATM. Unable to raise additional capital, regulators had no option except to close Ideal Federal.
The cost to close Ideal Federal is estimated at $2.1 million. Ideal Federal is the nation’s 88th banking failure this year and the third in Maryland.