Regulators closed seven banks Friday, including the largest bank subsidiary of bankrupt Advanta Corp.
Resolving the banks, which held a combined $3.3 billion in assets, will cost the Federal Deposit Insurance Corp. $1.3 billion. The year's failure tally now stands at 37, or more than double the number at this point last year.
The failure of $1.6 billion-asset Advanta Bank Corp. was anticipated following the November collapse of its parent, which specialized in small-business credit cards. The failure is expected to cost $636 million, or nearly 40% of its assets. The FDIC said it could not find a buyer for the Draper, Utah-based institution. Depositors will receive their insured funds — totaling about $1.5 billion — directly. The bank had only about $247,000 in uninsured deposits.
Of the six other failures, one was a national bank, and the rest were state-chartered. Three were based in Georgia.
Regulators in the Peach State closed $1 billion-asset Appalachian Community Bank in Ellijay, $378 million-asset Bank of Hiawassee and $96 million-asset Century Security Bank in Duluth.
Appalachian's $918 million in deposits were sold to Carrollton, Ga.-based Community & Southern Bank, along with essentially all of the failed bank's assets. The FDIC and the acquirer agreed to share losses on $799 million of those assets. The failure was estimated to cost the FDIC $419 million.
Citizens South Bank in Gastonia, N.C., agreed to assume all of Bank of Hiawassee's $340 million in deposits and take over roughly all of its assets, while sharing losses with the FDIC on $233 million of those assets. The FDIC estimated the resolution's cost at $138 million.
Bank of Upson in Thomaston, Ga., agreed to assume all of Century Security's $94 million in deposits and acquire essentially all of its assets. The FDIC will share losses on $81 million of those assets with the acquirer. The resolution was estimated to cost $30 million.
Meanwhile, Alabama regulators closed $137 million-asset First Lowndes Bank in Fort Deposit. The FDIC sold all $131 million of its deposits and virtually all of its assets to First Citizens Bank in Luverne, Ala. The acquirer agreed to share losses with the FDIC on $104 million of those assets. The cost of the failure was estimated at $38 million.
Regulators in Minnesota closed $28 million-asset State Bank of Aurora. Northern State Bank in Ashland, Wis., assumed all of the failed bank's $28 million in deposits, and acquired essentially all of its assets. The FDIC and the acquirer will share losses on about $21 million of those assets. The resolution's cost was estimated $4 million.
The Office of the Comptroller of the Currency closed $70 million-asset American National Bank in Parma, Ohio. The National Bank and Trust Co. in Wilmington, Ohio, purchased all of its $67 million in deposits and roughly all of its assets. The acquirer and the FDIC will share losses on about $50 million of those assets. The resolution was estimated to cost the government $17 million.
Register or login for access to this item and much more
All Financial Planning content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access