Five banks that closed Friday, including one in New Mexico, one in Florida, one in Kansas and two in the Pacific Northwest, were closed by regulators Friday. Additionally, regulators approved the first use of a ‘shelf charter’ for the acquisition of a failed bank.
The Office of the Comptroller of the Currency (OCC) approved the use of a shelf charter – a new mechanism that involves the granting of preliminary approval to investors for a national bank charter – by Bond Street Bank NA to acquire a Florida bank that was placed in receivership.
The charter remains inactive, or ‘on the shelf,’ until such time as the investor group is in a position to acquire a troubled institution. By granting the preliminary approval, the OCC expands the pool of potential buyers available to buy troubled institutions and, in particular, the new equity capital available to bid on troubled institutions through the Federal Deposit Insurance Corp.'s (FDIC bid process.
Bond Street Bank NA was granted preliminary approval as a shelf charter on Oct. 23, 2009. On Friday, the OCC granted final approval for the bank to establish Premier American Bank NA, which acquired Premier American Bank, a state-chartered bank that was closed by the Florida Department of Financial Services, Division of Banking. The final approval is subject to various conditions to ensure the safe and sound operation of the new bank.
The failed Premier American Bank had approximately $350.9 million in total assets and $326.3 million in total deposits at the end of September. Premier American Bank NA and the FDIC entered into a loss-share transaction on $300 million of Premier American Bank's assets. The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $85 million.
Charter Bank, based in Santa Fe, N.M., was closed by the Office of Thrift Supervision. The FDIC, as receiver, entered into a purchase-and-assumption agreement with Albuquerque, N.M.-based Charter Bank, which is, similarly, a newly chartered federal savings bank and a subsidiary of Plano, Texas-based Beal Financial Corp., to assume all of the deposits of Charter Bank.
Charter Bank had approximately $1.2 billion in total assets and $851.5 million in total deposits as of the end of September 2009. The Beal subsidiary did not pay the FDIC a premium for the deposits of Charter Bank. In addition to assuming all of the deposits of the failed bank, the Beal subsidiary agreed to purchase essentially all of the assets.
The FDIC and Charter Bank entered into a loss-share transaction on $805.5 million of Charter Bank's assets. The FDIC estimates that the cost to the DIF will be $201.9 million.
Columbia River Bank, The Dalles, Ore., was closed by the Oregon Division of Finance and Corporate Securities. The FDIC entered into a purchase-and-assumption agreement with Columbia State Bank, Tacoma, Wash., to assume all of the deposits of Columbia River Bank.
As of Sept. 30, 2009, Columbia River Bank had approximately $1.1 billion in total assets and $1 billion in total deposits. Columbia State Bank will pay the FDIC a premium of 1% to assume all of the deposits of Columbia River Bank. In addition to assuming all of the deposits of the failed bank, Columbia State Bank agreed to purchase essentially all of the assets.
The FDIC and Columbia State Bank entered into a loss-share transaction on $697.4 million of Columbia River Bank's assets. The FDIC estimates that the cost to the DIF will be $172.5 million.
The Washington Department of Financial Institutions closed Seattle-based Evergreen Bank. Umpqua Bank in Roseburg, Ore., has agreed to assume all of the deposits and essentially all the assets of the bank.
As of September 2009, Evergreen Bank had approximately $488.5 million in total assets and $439.4 million in total deposits. The estimated cost to the DIF is $64.2 million.
Bank of Leeton, Leeton, Mo., was closed by the Missouri Division of Finance, and the FDIC entered into a purchase-and-assumption agreement with Sunflower Bank NA, Salina, Kan., to assume all of the deposits of Bank of Leeton. The FDIC, as receiver, will retain most of the assets from Bank of Leeton for later disposition.
As of Dec. 31, 2009, Bank of Leeton had approximately $20.1 million in total assets and $20.4 million in total deposits. The FDIC estimates that the cost to the DIF will be $8.1 million.
SOURCE: Federal Deposit Insurance Corp.