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

Over $300 Million in Losses from Friday's Failures

Six banks fail on Friday

July 17, 2010

By staff

On Friday, six banks and thrifts -- including three in Florida -- failed. The failed firms had more than $2 billion in assets. As a result, the nation's Deposit Insurance Fund is expected to be depleted by more than $300 million.

Woodlands Bank was the first failure. The Office of Thrift Supervision seized the South Carolina bank, noting that it was "in an unsafe and unsound condition to transact business because of poor earnings, deteriorating asset quality and insufficient capital."

The Federal Deposit Insurance Corp., which is named receiver on all federally insured bank failures, pegged associated losses to its Deposit Insurance Fund at $115 million.

The OTS issued a civil money penalty against Woodlands Bank in February and a prompt corrective action against it in March.

After that, Metro Bank of Dade County was closed by the Florida Office of Financial Regulation, Turnberry Bank was seized by the OTS and First National Bank of the South was shuttered by the Office of the Comptroller of the Currency. All three institutions were acquired by NAFH National Bank in Miami.

The OCC noted that NAFH was approved for a shelf charter in order to make the acquisitions. Shelf charters enable investors to obtain a national bank charter that remains inactive until investors are in a position to make an acquisition of a failed bank. Their use expands the pool of potential buyers for failed institutions. It was only the second shelf charter issued.

Metro Bank was hit with a prompt corrective action in June by the Federal Reserve and entered a formal agreement with the regulator in August 2009.

First National -- which faced an OCC cease-and-desist order in April 2009 -- exited the wholesale lending business in September 2009.

Next, the OTS closed Olde Cypress Community Bank. The Florida institution entered a formal agreement with the OTS in October 2009.

Finally, the OTS seized Mainstreet Savings Bank, FSB. The Michigan company, which was acquired by Commercial Bank, faced an OTS prompt corrective action in December 2009.

Mainstreet was the 96th FDIC-insured institution to fail during 2010 and the 120th mortgage-related closing tracked by this year.

The following table outlines details about the failed institutions.

July 16, 2010 Bank Failures
Bank Location Regulator Deposits (mil) Deposit prem. paid Assets (mil) Home Loans (mil) CRE Loans (mil) C&D (mil) Year Founded # Emp Acquirer FDIC Loss-Share Amount (mil) Deposit Ins. Fund Losses (mil)
First National Bank of the South Spartanburg, S.C. OCC $610 million 0.00% $682 million $158 million $212 million $109 million 2000 135 NAFH National Bank $512 million $75 million
Mainstreet Savings Bank, FSB Hastings, Mich. OTS $64 million 1.13% $97 million $64 million $7 million $2 million 1924 33 Commercial Bank $77 million $11 million
Metro Bank of Dade County Miami Florida Office of Financial Regulation $391 million 0.00% $442 million $39 million $156 million $65 million 1984 73 NAFH National Bank $299 million $67 million
Olde Cypress Community Bank Clewiston, Fla. OTS $162 million 0.00% $169 million $79 million $28 million $16 million 1937 44 CenterState Bank of Florida, National Association $128 million $32 million
Turnberry Bank Aventura, Fla. OTS $197 million 0.00% $264 million $120 million $50 million $17 million 1985 44 NAFH National Bank $195 million $34 million
Woodlands Bank Bluffton, S.C. OTS $355 million 0.00% $376 million $72 million $94 million $97 million 1987 40 Bank of the Ozarks $289 million $115 million

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