Friday, March 11, 2011

The New FDIC Partner "Banks"


FDIC Structured Sales Transactions 

Since May of 2008, the FDIC turned to a “partnership model to sell large numbers of distressed assets (primarily non-performing single family and commercial real estate loans and related real property) held by recently failed financial institutions.”

As of March 2011, the FDIC has closed 24 structured sale transactions transferring 38,800 assets and $23.3 billion in unpaid principal balance.

The FDIC stays on as a partner in these transactions with the stated goal of capturing upside and appreciation as the loans are worked through and the economy and asset values recover.

For the borrowers of failed banks whose loans were acquired in the structured transactions, the new FDIC entities have become, in essence, the borrower’s new bank as the loans are worked out and resolved with the new owners.

Four investor groups (highlighted in yellow below) have dominated the bidding, in some cases winning multiple bids, and together accounting for nearly 60% of the book value purchased in structured transactions as well as now controlling over 50% of loans assumed by the FDIC LLC’s.



Winning FDIC Structured Sale Bidder
No. of Loans
Implied Price (millions)
Book Value (millions)
Cache Valley Bank
                 761
$63
$279
Colony Capital Acquisitions, LLC
              5,104
$1,904
$4,035
Diversified Business Strategies
                 147
$205
$702
Gulf Coast Bank & Trust
                 733
$48
$146
Hudson Realty Capital Fund V LP
                 110
$19
$102
Kingston Management Services
              1,112
$101
$1,120
Mariner Real Estate Partners, LLC
              1,062
$264
$762
OneWest Ventures Holdings LLC
              3,044
$271
$1,652
PennyMac
              2,829
$215
$558
PMO Loan Acquisition Venture, LLC (OakTree Capital)
                 279
$695
$1,703
Residential Credit Solutions, Inc.
              9,230
$1,191
$2,218
Rialto Capital Management LLC
              5,511
$1,235
$3,052
Roundpoint Capital Group
              6,786
$416
$1,094
Square Mile Capital LLC
                    57
$346
$421
Starwood (Northwest Operating Company) LLC
                 101
$2,725
$4,402
Stearns Bank
                 520
$161
$733
Turning Point Asset Management, LP
              1,456
$111
$314
Totals
38,842 
$9,971
 $   23,293