Trust Company Bank, Memphis, Tennessee, was closed by state regulators who appointed the FDIC as receiver. In order to protect depositors the FDIC sold the failed bank to The Bank of Fayette County, Piperton, Tennessee.
Trust Company Bank is the second banking failure of the year. The last banking failure of 2016 occurred on March 11 when regulators closed North Milwaukee State Bank, Milwaukee, Wisconsin.
Established in 1902, Trust Company Bank was one of the oldest banks in the country and many of its shareholders were members of the local community as noted on the Bank’s website.
Community Trust is the relationship forged by the bank accepting local citizens as stockholders and depositors, financing the growth and development of local businesses, individuals, and institutions, thereby fundamentally aligning the interest of the bank and the communities it serves.
Employee Trust is created by the bank’s commitment to attract, retain, and motivate employees, and by employees reciprocal commitment of intense effort and dedication to the bank and its principles of service to clients, community, employees and shareholders.
Shareholder Trust is achieved by providing superior returns to the shareholders, that have provided the capital that enables the bank to serve its clients, the communities in which it operates, and its employees.
Despite having been in business for over a century Trust Company Bank was strictly a small local player in the banking industry with only $20.7 million in assets at the time of its failure. All four branches of Trust Company Bank will reopen as branches of The Bank of Fayette County and all deposits will continue to be insured by the FDIC up to the applicable deposit limits. All depositors of Trust Company Bank have full access to their money over the weekend through the use of checking accounts, debit cards, and ATM cards.
As of December 31, 2015, Trust Company had total assets of $20.7 million and total deposits of $20.3 million. The Bank of Fayette County agreed to assume all deposits of Trust Company Bank but agreed to buy only $3.9 million of the failed bank’s assets. The remaining $16.8 million of assets will be retained by the FDIC for later disposition.
The cost to the FDIC Deposit Insurance Fund for the failure of Trust Company Bank is $7.2 million. The last banking failure in Tennessee occurred on August 23, 2013, when Community South Bank, Parsons, TN, was closed by regulators.