Community South Bank, TN, Becomes Second Largest Bank Failure of 2013

Bank The second largest bank failure of the year occurred today as regulators closed down Community South Bank, Parsons, Tennessee, which had total assets of $386.9 million as of June 30, 2013.  The largest bank closing of the year in terms of total assets occurred on June 7, 2013 when regulators shuttered Mountain National Bank, also located in Tennessee, which had $437.5 million in total assets.

The 20 banks that have failed to date during 2013 had total assets of $2.8 billion.  The assets of the two failed banks in Tennessee represent the two largest bank failures of 2013 and account for almost 30% of the total assets of all failed banks.

Community South Bank tried to set itself apart from other banks through its “hometown approach” to banking which involved providing superior personal service and products to every customer.  The 15 bank branches operated by Community South provided service to communities throughout west, middle and east Tennessee.

Originally established in 1968, Community South Bank was formed as a result of a merger in 2000 between three different Tennessee banks – Bank of Adamsville, Citizens State Bank and Lewis County Bank.

The FDIC sold the failed bank to CB&S Bank, Inc. Russellville, Alabama, which will assume all deposits of Community South Bank.

All 15 branches of Community South Bank will reopen as branches of CB&S Bank and FDIC deposit insurance will continue uninterrupted up to the applicable limits.  Over the weekend, customers of the failed bank have access to their money through the use of debit cards, ATMs and checking accounts.

Community South Bank had total assets of $386.9 million and total deposits of $377.7 million as of June 30, 2013.  Due to the poor asset quality, CB&S Bank agreed to purchase only $121.7 million of the failed bank’s assets.  The remaining assets of $265.2 million will be retained by the FDIC for later disposition.

The cost to the FDIC Deposit Insurance Fund for the failure of Community South Bank is $72.5 million.  Community South Bank becomes the 19th banking failure of 2013 and the second in Tennessee.  The total loss to the FDIC for the 20 banking failures of 2013 currently total $504.2 million.  During 2012, there were 51 bank failures which cost the FDIC DIF $2.5 billion.


  1. why and how does this happen? Were the people there fired for wrong doing?

  2. It is the height of hypocrisy for the FDIC to decide to go after directors of banks that failed when FDIC examiners provided the best ratings to these same entities shortly before they failed. If examination ratings were publicly available, the FDIC would not bother to sue these directors because the public could see that for the the bankers to be grossly negligent in running the bank would have shown up in the examination ratings if true. I ought to know since I headed up the FDIC’s large bank (LIDI) program for a number of years up to the banking crisis. I blew the whistle on the gross negligence of senior officials at the FDIC for ignoring rising risk conditions and then burying the evidence.

    Check out and you will see my personal blog with this evidence.

    It is a shame that I am unable to get the Office of Special Counsel or Merit System Protection Board to consider my evidence and provide me due process. I have been denied a hearing to present my account because it would be too politically damaging to various top officials.

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