Federal regulators close Maimi-based bank, fifth bank failure of 2010January 23rd, 2010 - 3:42 pm ICT by BNO News
SAINT STEPHEN, MINNESOTA (BNO NEWS) — Federal regulators on Friday closed the Premier American Bank in Miami, marking the fifth U.S. bank failure of 2010 following an economic turbulent year that saw more than one hundred U.S. banks fail.
The Premier American Bank was closed by the Florida Office of Financial Regulation after its regular closing time on Friday. The Federal Deposit Insurance Corporation (FDIC) was appointed as receiver following its closure, who immediately entered into a purchase and assumption agreement with the Premier American Bank, National Association, a newly-chartered national institution, to assume all of the failed bank’s deposits.
Premier American Bank had four branches in South Miami, Blue Lagoon, Hialeah Gardens and Surfside.
Most, if not all customers, should see no or little service disruptions despite the closure of the institution. On Monday, the four branches of the Premier American Bank will reopen during their normal business hours as a branch of Premier American Bank, N.A.
All of the failed bank’s services, including checks, ATM and debit cards, will remain active. “Checks drawn on the bank will continue to be processed,” the FDIC said in a statement. “Loan customers should continue to make their payments as usual.”
As of September of last year, the Premier American Bank had approximately $350.9 million in total assets and $326.3 million in total deposits. Premier American Bank, N.A. did not pay the FDIC a premium to assume the deposits of Premier American Bank, the FDIC said. “In addition to assuming all of the deposits of the failed bank, Premier American Bank, N.A. agreed to purchase essentially all of the assets.”
The FDIC and the Premier American Bank, N.A. entered into a loss-share transaction on approximately $300 million of Premier American Bank’s assets. Premier American Bank, N.A. will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.
The FDIC said it estimates that the cost to the Deposit Insurance Fund (DIF) will be $85 million. It said Premier American Bank, N.A.’s acquisition of the deposits was the “least costly” resolution.
Friday’s closure was not only the fifth U.S. bank failure of 2010 but was also Florida’s first bank failure since December 18, 2009. Regulators then closed the Peoples First Community Bank in Panama City.
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