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.
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 MortgageDaily.com this year.
The following table outlines details about the failed institutions.