Saturday, July 17, 2010

Private-Equity Group Buys Three Banks as U.S. Failures Hit 96

Bloomberg

July 17, 2010, 12:01 AM EDT


North American, based in Charlotte, North Carolina, purchased two failed banks in Florida and one in South Carolina, according to statements posted yesterday on the Federal Deposit Insurance Corp.’s website. Three other banks were seized, including one in Michigan, costing the FDIC’s deposit-insurance fund a total of $334.8 million.July 17 (Bloomberg) -- North American Financial Holdings Inc., run by former Bank of America Corp. investment-banking head Gene Taylor, bought three lenders as U.S. failures this year rose to 96.

North American is one of two groups backed by private investors that have purchased failed banks through the FDIC’s resolution process this year. Through June, the FDIC had awarded only three of 86 failed banks to private investors. All three were purchased by Premier American Bank, backed by Bond Street Holdings LLC.

Regulators may close the most banks this year since 1992 as souring residential and commercial mortgages impair capital levels. The FDIC included 775 banks with $431 billion in assets on the confidential list of problem lenders as of March 31, an increase from 702 banks with $402.8 billion at the end of the fourth quarter. FDIC Chairman Sheila Bair has said 2010 failures will surpass last year’s total of 140.

North American purchased the banks through its newly chartered lender, NAFH National Bank. The bank purchased Miami’s Metro Bank of Dade County, Turnberry Bank of Aventura, Florida, and Spartanburg, South Carolina-based First National Bank of the South. NAFH added 23 branches and $1.2 billion in deposits.

Acquiring Banks

North American is seeking to deploy $900 million of capital raised for bank purchases. Last month, it agreed to pay $175 million to acquire Florida-based TIB Financial Corp.

Taylor worked at Bank of America for 38 years, including stints heading its Florida business and most recently as head of commercial and investment banking, reporting to then-CEO Kenneth Lewis. Other longtime Bank of America executives are backing the effort, including former CEO Hugh McColl Jr. and finance chief Marc Oken through their Charlotte, North Carolina-based investment firm Falfurrias Capital Partners.
In other closings, the Office of Thrift Supervision seized Woodlands Bank of Bluffton, South Carolina, which was sold by regulators to Bank of the Ozarks in Little Rock, Arkansas. The buyer picked up eight branches and about $376 million in assets.

Regulators also closed Mainstreet Savings Bank of Hastings, Michigan and Clewiston, Florida-based Olde Cypress Community Bank. Both held less than $170 million in assets, according to the FDIC. Regulators have closed 17 Florida banks this year.

--With assistance from David Mildenberg in Charlotte, North Carolina. Editors: Dan Reichl, Peter Blumberg.

To contact the reporter on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net

To contact the editor responsible for this story: Alec McCabe at amccabe@bloomberg.net.