FDIC to Open New Office in Florida
August 10, 2009
Federal regulators are staffing up for next month’s scheduled opening of what is poised to be a 500-person bank failure and asset sales office in Florida. The Federal Deposit Insurance Corp, which insures individual accounts up to $250,000, plans to open a “temporary” east coast office on Jacksonville’s south side of town in September. The FDIC has used these temporary offices throughout its history to keep asset resolution staff closer to the concentration of failed bank assets.
Many industry experts expect a surge of bank failures to occur in Florida in the upcoming months. Since January 2008 only eight of the 98 FDIC institutions to fail have been headquartered in Florida. A complete list of FDIC closures since October 1, 2000 can be found at the FDIC web site (http://www.fdic.gov/bank/individual/failed/banklist.html). By comparison, neighboring Georgia leads the nation in bank failures with 21 seizures, or 22 percent of the overall total closings, since 2008, based on FDIC data.
The FDIC’s satellite office is viewed by many industry watchers as further proof that a series of Florida bank failures is imminent in the upcoming months. The FDIC is not dispelling the speculation.
On August 7th, two more Florida banks — First State Bank, of Sarasota, and Community National Bank of Sarasota County, in Venice, — and one Oregon bank — Community First Bank, of Prineville were closed by the FDIC. The FDIC does not identify “problem” banks and will not release any information or a watch list to the public regarding the safety and soundness of the banks that it regulates since they do not want to create an artificial “bank run” scenario on a member bank. Many outside firms have put together various lists. Based upon Florida banks with weakest asset quality (as of 12/31/08), Florida Community Bank of Immokalee, was the weakest on a list compiled by Highline Financial, Inc. with a nonperforming assets ratio of 22.81%. See the entire list here.
In another report issued August 3rd, Fox News reported that Colonial Bank (CNB) had one of its locations receive a search warrant from federal investigators tied to the Troubled Asset Relief Program.
A company press release from July 31 said that Colonial was not in compliance with the regulatory requirements for Tier 1 capital ratio and total risk-based capital ratio, and management said it had doubts about the company’s ability to continue as a going concern. Colonial Bank is based in Montgomery, AL but has numerous locations in the State of Florida.