The Federal Insurance Deposit Corp. could not come to agreement with four potential suitors for Silverton Bridge Bank N.A., and now it is liquidating the $4.1 billion-asset banker’s bank located in Atlanta, Ga. Carlyle Group, Lightyear Capital, Harvest Partners, and Colony Capital had submitted a co-equal bid together in mid-May, but no deal could be reached before the Office of the Comptroller of the Currency shuttered Silverton. Neither the companies nor the FDIC would comment on the bid.
FDIC spokesman David Barr notes that the FDIC “has been running the institution as a bridge bank” since it failed on May 1, and will soon conduct an “orderly wind-down” and sale of the bank’s “component parts.” At the time of its closing, Silverton held $3.3 billion in deposits, and cost the FDIC $1.3 billion from the Deposit Insurance Fund. “Our original estimate was based on not finding a buyer,” explains Barr, who adds the FDIC could “smoothly transition correspondent banking services to other providers” by July 29.
In a more run-of-the-mill closure, receivership and resolution, Bank of Lincolnwood became the 37th institution to fall victim in 2009. The two branches of the Lincolnwood, Ill. bank reopened as offices of Republic Bank of Chicago in Oak Brook, Ill. Republic assumed all of Lincolnwood’s $202 million in deposits and $164 million of its $214 million in assets. The DIF will be drawn down $83 million as a result.
The FDIC’s abrupt liquidation of Silverton is thought to be a momentary glitch in the agency’s engagement of the PE sector, some analysts believe. Just last month John Kanas, former chairman and chief executive officer of North Fork Bancorporation led a group of investors in acquiring failed BankUnited from the FDIC after a four-month auction run by the agency. The buyers included funds advised by W.L. Ross & Co., Carlyle Group, Centerbridge Partners, the Lefrak Organization, Wellcome Trust, Greenaap Investments, and the East Rock Endowment Fund.