The Wall Street Journal
Regulators seized two banks Friday, in Missouri and Florida, lifting the total number of failures this year to six.
The Florida bank, based in Miami, was sold to an investment group that received a so-called shelf charter last year to acquire failed financial institutions. The Federal Deposit Insurance Corp. estimated the closings will cost the agency's cash-strapped deposit-insurance fund a total of $93.1 million.
The Florida bank, based in Miami, was sold to an investment group that received a so-called shelf charter last year to acquire failed financial institutions. The Federal Deposit Insurance Corp. estimated the closings will cost the agency's cash-strapped deposit-insurance fund a total of $93.1 million.
In the first seizure Friday, the FDIC sold Premier American Bank's four branches, $326 million in deposits and some of its assets to a subsidiary of Naples, Fla.-based Bond Street Holdings LLC, the group granted a preliminary shelf charter in October 2009 to establish a new national bank. Regulators have been encouraging investors to apply for such charters as a way of expanding the pool of potential buyers, and this is the first time a group was successful in using the tool to pick up a failed institution, according to the Office of the Comptroller of the Currency.
Bond Street Holdings was allowed to keep Premier American's name, and it will reopen Monday as Premier American Bank NA.
Bond Street Holdings has about 70 mutual funds, hedge funds, private-equity firms and individuals as investors, according to Bond Street attorney David Katz. One is former North Fork Bancorp finance chief Dan Healy, who will be chief executive and chairman of the new Premier American. Another investor is Stuart Oran, a senior managing director of advisory firm FTI Consulting and former executive with United Airlines.
The FDIC and the new owner also agreed to share losses on $300 million of the failed bank's assets.
In the second failure Friday, state regulators closed Leeton, Mo.-based Bank of Leeton and the FDIC sold the sole branch and all $20.4 million in deposits to Salina, Kan.-based Sunflower Bank. The FDIC will retain most of the assets.
Since 2008, regulators have closed 170 banks, and the expectation is that failures will continue to accelerate in 2010 as financial institutions struggle with residential and commercial loan defaults and heightened regulatory scrutiny. FDIC Chairman Sheila Bair has predicted that failures will "peak" this year and then "subside."
Bond Street Holdings was allowed to keep Premier American's name, and it will reopen Monday as Premier American Bank NA.
Bond Street Holdings has about 70 mutual funds, hedge funds, private-equity firms and individuals as investors, according to Bond Street attorney David Katz. One is former North Fork Bancorp finance chief Dan Healy, who will be chief executive and chairman of the new Premier American. Another investor is Stuart Oran, a senior managing director of advisory firm FTI Consulting and former executive with United Airlines.
The FDIC and the new owner also agreed to share losses on $300 million of the failed bank's assets.
In the second failure Friday, state regulators closed Leeton, Mo.-based Bank of Leeton and the FDIC sold the sole branch and all $20.4 million in deposits to Salina, Kan.-based Sunflower Bank. The FDIC will retain most of the assets.
Since 2008, regulators have closed 170 banks, and the expectation is that failures will continue to accelerate in 2010 as financial institutions struggle with residential and commercial loan defaults and heightened regulatory scrutiny. FDIC Chairman Sheila Bair has predicted that failures will "peak" this year and then "subside."
