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Aug 2, 2008 7:00 am US/Eastern
Florida Sees 1st Bank Failure As Economy Stumbles
First Priority Bank Of Bradenton Was Taken Over By Regulators Friday
Bank Will Re-Open Monday Under SunTrust Name
BRADENTON (CBS4) ―
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First Priority Bank of Bradenton branches will re-open as SunTrust branches after it became the first Florida bank to fail since 2004.,
CBS
The first Florida bank to be claimed in this latest economic downturn was taken over by the feds Friday, and will re-open Monday under the control of SunTrust banks.
First Priority Bank of Bradenton is the eighth bank to be taken over this year by the Federal Deposit Insurance Corporation, and the first bank in Florida to fail.
The FDIC guarantees deposits of up to $100 thousand per account in the bank, and made the arrangements for the bank's assets to be assumed by SunTrust, which has banking locations around the state.
Andrew Gray, spokesman for the FDIC, said the bank had "significant loan losses" in the Florida commercial real estate market that eroded its capital. It is the first bank to fail in the state since 2004, when Guarantee National Bank of Tallahassee was closed by the FDIC.
Last month, California mortgage lender IndyMac Bancorp Inc. became the largest regulated thrift to fail in U.S. history. IndyMac's holding company filed for Chapter 7 bankruptcy protection on Thursday.
Friday, the Florida Office of Financial Regulation closed First Priority The FDIC was then named receiver of the bank, and entered into an agreement with Atlanta-based SunTrust Bank to assume its insured deposits.
First Priority Bank had six branches which will all re-open as SunTrust branches.
"It will be a pretty seamless transition for the depositors," Gray said.
SunTrust Banks was the 13th largest bank by assets as of March 31, with nearly $179 billion in assets, according to American Banker. In addition to assuming the failed bank's insured deposits, it will buy about $42 million of First Priority's assets. LNV Corp. of Plano, Texas, has agreed to buy another $14 million of the failed bank's assets. The FDIC will keep the remaining assets for later disposition, it said.
As of June 30, First Priority had total assets of $259 million and total deposits of $227 million, including $13 million in uninsured deposits, the FDIC said. It estimated that those deposits were held in about 840 accounts that potentially exceeded the FDIC's $100,000 per depositor insurance limit.
Some of those depositors could get a portion of their funds back, and the FDIC urged those account holders to contact the agency.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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