WASHINGTON — For the second Friday in a row, the Federal Deposit Insurance Corp. relied on new-bank capital to find homes for the operations of failed institutions.
On a night when regulators closed six banks, the FDIC sold one to a newly chartered institution in Georgia, and the private-equity team that took over a failed Miami bank last week struck again, buying another failed bank in Florida.
In all, the failed institutions totaled $5.5 billion in assets, and cost the FDIC an estimated $1.8 billion. They stretched the year’s total to 15.
First National Bank of Georgia, an $833 million-asset institution in Carrollton, was sold to an investment team led by former bank turnaround artist Patrick Frawley. The group had formed Community & Southern Bank to assume the failed bank’s operations.
Meanwhile, Delaware-based Bond Street Holdings, which last week became the first private-equity group to use a special "shelf" charter to assume failed-bank assets, used it again to buy $875 million-asset Florida Community Bank.
The other failed banks were: $2.2 billion-asset First Regional Bank in Los Angeles; $1.2 billion-asset Community Bank & Trust in Cornelia, Ga.; $60 million-asset Marshall Bank in Hallock, Minn.; and $373 million-asset American Marine Bank in Bainbridge Island, Wash.
The resolutions involving new charters come as the FDIC continues to seek new ways to unload failed banks, and many hope the agency is becoming more open to private-equity buyers.
Community & Southern, with Frawley as its chief executive, agreed to assume all of First National’s $758 in deposits, as well as acquire roughly all of its assets. The buyer paid a 1.25% deposit premium, and agreed to share losses with the FDIC on a $607 million chunk of the failed bank's assets. The FDIC estimated the failure would cost $260 million.
Premier American Bank, which Bond Street formed last week after buying a failed bank of the same name, agreed to pay a 0.4% premium for all $795 million in deposits and acquire over half of the assets belonging to Florida Community, based in Immokalee. The acquirer and the FDIC agreed to share losses on $305 million of the failed bank’s assets. The failure was estimated to cost $353 million.
The biggest failure of the night was that of First Regional. First-Citizens Bank & Trust Co. in Raleigh, N.C., assumed all of the failed bank's $1.9 billion in deposits — paying no premium —and virtually all of its assets. A loss-sharing deal between First-Citizens and the FDIC will cover $2 billion of those assets. The FDIC estimated the cost of the failure at $825 million.
Meanwhile, Community Bank & Trust’s operations were sold to SCBT, a national bank in Orangeburg, S.C. The buyer assumed all of the failed bank's $1.1 billion in deposits — also paying no premium — and agreed to take over roughly all of its assets. SCBT and the FDIC will share losses on $828 million of those assets. The estimated cost of the failure is $354 million.
The FDIC sold American Marine’s operations to Columbia State Bank in Tacoma. The acquirer paid a 1% premium for all of the failed bank's $308 million in deposits, and agreed to purchase roughly all of its assets. Columbia State entered into a loss-sharing deal with the FDIC for $255 million of those assets. The failure was estimated to cost $59 million.
United Valley Bank in Cavalier, N.D., paid a 7.35% premium to assume all $55 million of Marshall’s deposits. The acquirer also agreed to take over roughly all of the assets, and will share losses with the FDIC on a $24 million portion. The agency estimated the failure will cost $4 million.
