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The Mortgage Graveyard
Failed, closed and a c q u i r e d mortgage-related entities.
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| 2 Bank Failures Last Week
1 closed on Thursday, 1 on Friday
June 10, 2013
By Mortgage Daily staff
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Two bank failures last week included a financial institution with more than $400 million in assets and a small bank with related losses that are expected to exceed half of its total assets.
Mountain National Bank was seized Friday by the Office of the Comptroller of the Currency and closed down.
The regulator noted in an announcement that unsafe and unsound practices led to substantial dissipation of assets and earnings.
"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," the statement said.
Mountain National Bank was established in November 1998. As of March 31, it employed 127 people.
Residential loan holdings finished March at $84 million, while commercial real estate loans totaled $122 million and construction-and-development loans were $32 million.
The Federal Reserve Bank of Atlanta entered a formal agreement with parent Mountain National Bancshares Inc. in November 2011.
The OCC, which entered a formal agreement with Mountain in June 2009, appointed Federal Deposit Insurance Corp. as receiver for the Sevierville, Tenn.-based bank.
Following a secret bidding process, First Tennessee, N.A., won its bid to purchase all of Mountain National Bank's $437 million in total assets and assume its $373 million in total deposits.
The bank failure is expected to deplete the Deposit Insurance Fund by $34 million.
Using its self-appointment powers granted through the FDIC Improvement Act of 1991, the FDIC's board of directors Thursday issued an order authorizing the FDIC to close 1st Commerce Bank and become its receiver.
It was one of the rare instances that the FDIC closed an institution itself and on a day other than Friday.
1st Commerce was established in October 2006 and employed just five people. It owned no home loans but had $6 million in commercial mortgages and less than $1 million in C&D loans.
An FDIC cease-and-desist order was issued against 1st Commerce in March 2010, while another cease-and-desist order was issued in July 2010.
Plaza Bank agreed to assume all of the North Las Vegas, Nev., bank's $20 million in total deposits and acquire all of its $20 million in total assets.
The FDIC expects to lose $12 as a result of 1st Commerce Bank's failure -- a staggering 60 percent of its assets.
In all 16 FDIC-insured banks have failed this year -- bringing the 2013 mortgage-related casualty count to 32 entities.
The restructuring of Pacific Union Financial's fulfillment and corporate support center in Walnut Creek, Calif., resulted in most of the staff being let go and managers being transferred to the Irving, Texas, headquarters, Inside Mortgage Finance reported. |
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Corporate Mortgage News
M e r g e r s, a c q u i s i t i o n s and private and public offerings. Other corporate activity including executive appointments, bankruptcies name changes.
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Bank news
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Financial Regulation News | Mortgage Regulations
Bank and mortgage regulators, regulations and regulatory actions. Coverage of regulatory legislation and testimony.
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