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The Mortgage Graveyard
Failed, closed and a c q u i r e d mortgage-related entities.

Bank Failure Follows CEO's Death

Recent Mortgage Graveyard activity

May 1, 2011

By staff

One of Friday's five bank failures is expected to cost more than $300 million, while the chief of another of Friday's closings was recently found dead with a gunshot wound to the head. In all, more than $600 million in losses are expected from last week's bank failures.

First National Bank of Central Florida was closed Friday by the Office of the Comptroller of the Currency. The procedure when a federally insured bank fails is to appoint the Federal Deposit Insurance Corp. as receiver, and this was done with First National.

"The OCC acted after finding that the bank had experienced substantial dissipation of assets and earnings due to unsafe or unsound practices," the regulator's announcement said. "The OCC also found that the bank incurred losses that depleted its capital, the bank is critically undercapitalized, and there is no reasonable prospect that the bank will become adequately capitalized without federal assistance."

First National entered a formal agreement with the OCC in July 2009.

After that, Cortez Community Bank was seized and shuttered by the Florida Office of Financial Regulation. The small institution faced an FDIC cease-and-desist order in April 2010.

Premier American Bank, N.A., scooped up both failed institutions -- picking up more than $420 million in assets and more than $380 million in deposits.

The next pair of banks to fail -- Dallas, Ga.-based First Choice Community Bank and Valdosta, Ga.-based The Park Avenue Bank -- were both closed by the Georgia Department of Banking and Finance and both acquired by Bank of the Ozarks. The state said that the Official Code of Georgia, Section 7-1-150(a), authorizes it to take possession of banks "whenever such financial institution is either insolvent or operating in an unsafe or unsound condition to transact its business."

More than $300 million in charges to the Deposit Insurance Fund are expected as a result of the failure of Park Avenue -- which had nearly $1 billion in assets. It was last week's most costly failure

Park Avenue faced a prompt corrective action by the Federal Reserve Board in December 2010 and an FDIC cease-and-desist order four months earlier. The bank and parent PAB Bankshares Inc. entered a former agreement with Georgia and the Federal Reserve Bank of Atlanta in July 2009.

First Choice faced an FDIC cease-and-desist order in January 2010.

In Mount Clemens, Mich., the state's Office of Financial and Insurance Regulation took possession of Community Central Bank and handed it to the FDIC -- which sold it to Talmer Bank & Trust. More than $180 million in losses are projected from Community Central's failure -- the 39th FDIC-insured bank to fail in 2011. Michigan reassured its residents that "Michigan's banking industry continues to be fundamentally sound and well-capitalized despite a difficult economy."

Community Central Bank Corp. entered a formal agreement with the Federal Reserve Bank of Chicago in January, while the bank was hit with an FDIC cease-and-desist order in November 2010. It faced a civil money penalty from the FDIC in September 2009 and another in August 2009.

Last year, Community Central said that its chief executive officer, Dave Widlak, had gone missing. A month later, published reports indicated that Widlak's body had washed ashore in Lake St. Clair, around 27 miles north of Detroit, with a gunshot wound to the head. Investigators later indicated that suicide was suspected.

Also on Friday, the Utah Department of Financial Institutions seized Utah Central Credit Union and appointed the National Credit Union Administration as liquidating agent. The assets and liabilities of the Salt Lake City institution were taken over by Chartway Federal Credit Union. Utah Central had around $157 million in assets and 22,000 members.

"Utah Central Credit Union's declining financial condition led to its closure and its subsequent purchase and assumption," NCUA stated.

Mortgage Daily has covered 10 credit union failures so far in 2011. Including all mortgage-related entities, 56 operations have either failed or been closed down.

U.S. Bankruptcy Judge Allan L Gropper has signed off the Chapter 11 liquidation plan of C-BASS, reported. Creditors holding around $2 billion in debt will split up around $196 million in assets.

April 29, 2011, Bank Failures
Bank Location Regulator Deposits Deposit prem. paid Assets Home Loans CRE Loans C&D Year Founded # Emp Acquirer FDIC Loss-Share Amount Deposit Ins. Fund Losses
Community Central Bank Mount Clemens, Michigan Michigan Office of Financial and Insurance Regulation $385 million 0.25% $476 million $85 million $235 million $8 million 1996 87 Talmer Bank & Trust $362 million $183 million
Cortez Community Bank Brooksville, Florida Florida Office of Financial Regulation $61 million na $71 million $15 million $17 million $16 million 2004 19 Premier American Bank, N.A. $51 million $19 million
First Choice Community Bank Dallas, Georgia Georgia Department of Banking and Finance $310.0 million na $309 million $23 million $135 million $76 million 2007 70 Bank of the Ozarks $261 million $92 million
First National Bank of Central Florida Winter Park, Florida Office of the Comptroller of the Currency $312 million na $352 million $49 million $141 million $44 million 1985 74 Premier American Bank, N.A. $270 million $43 million
The Park Avenue Bank Valdosta, Georgia Georgia Department of Banking and Finance $828 million na $953 million $125 million $220 million $110 million 1956 182 Bank of the Ozarks $514 million $306 million

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