The Federal Deposit Insurance Corp. has shut down Silverton Bank, the failed Atlanta "bank of banks," instead of selling it to private equity investors, according to a person familiar with the situation.
An FDIC spokesman didn't immediately return a call and email for comment.
A consortium including Carlyle Group had been in discussions with federal regulators about a deal. Its failure to reach one illustrates the perils of distressed bank investing.
Last month, Carlyle along with three other private-equity firms acquired the banking operations of Florida's BankUnited Financial Corp. from federal regulators. That transaction seemed to demonstrate the government's willingness to sell banks to private-equity firms. But regulatory hurdles and restrictions on ownership are still making it difficult to get these deals done.
In addition to Carlyle, the group included private-equity investors Lightyear Capital, Harvest Partners and Colony Capital.
Silverton provides services to other banks and does not take consumer deposits. After seizing the bank May 1, regulators had created a "bridge bank" to operate Silverton while it looked for a buyer. The same happened with IndyMac Bank, Pasadena, Calif., which the FDIC sold to a group of investors earlier this year.
Because Silverton doesn't have retail deposits, its closure doesn't present the same problems that the shuttering of a more traditional bank would. Small community banks, which are Silverton's main customers, can take their business elsewhere.