An Arkansas bank has failed. Meanwhile, the failure of a much larger bank seven years ago proved to be very profitable for the acquirer.
Last Friday, the
Arkansas State Banking Department seized Allied Bank and closed down the Mulberry, Arkansas, financial institution.
Allied Bank, which was established back in 1902, reported that there were 40 people who were on its payroll of its the middle of this year.
Deposits totaled $65 million as of June 30, while assets were just $66 million — including
$12 million in residential loans, $12 million in commercial real estate loans and $3 million in construction-and-land-development loans.
The state appointed the Federal Deposit Insurance Corp. as receiver. After conducting a secret bidding process, the winning bid was awarded to Today’s Bank.
The FDIC projects that its Deposit Insurance Fund will be depleted by $7 million as a result of Allied Bank’s failure — the fifth bank failure this year.
Including Allied Bank, Mortgage Daily has covered 27 mortgage-related entities that have failed or been closed down so far this year.
Colonial Bank failed in August 2009. The Montgomery, Alabama-based company was the warehouse lender for Taylor, Bean and Whitaker Mortgage Corp., which collapsed a month earlier as a result of fraud committed by top executives at the company.
BB&T Corp. picked up
all of Colonial’s $20 billion in deposits from the FDIC. It also acquired $22 billion of the failed bank’s assets.
The acquisition by BB&T included a $15 billion loss-sharing agreement with the FDIC.
Last week, BB&T announced that subsidiary Branch Banking and Trust Co. agreed to terminate the loss-sharing agreement.
The deal has BB&T making a $230 million cash payment to the FDIC. In return, the
FDIC will no longer share in future benefits related to these assets.
“The acquisition of Colonial was a tremendously successful transaction and has far outperformed our initial expectations,” BB&T Chief Financial Officer Daryl N. Bible said in the announcement. “The early termination of these agreements is beneficial for both BB&T and the FDIC, including the reduction of costs and accounting, reporting complexity and increased future earnings.”
Cory Methodist Church Credit Union, which was placed into conservatorship in February by the Superintendent of the Ohio Division of Financial Institutions, has merged into Eaton Family Credit Union, the National Credit Union Administration announced earlier this month.
