WASHINGTON — Bank turnaround artist Patrick Frawley sealed deals to buy three failed institutions in Georgia on Friday, as regulators shuttered a total of six banks.
Former Sovereign Bancorp chairman Jay Sidhu also picked up the first New Jersey failure of the year.
The failed banks, which brought the year's total to 125, had combined assets of $1.3 billion and were estimated to cost the Deposit Insurance Fund $347.6 million.
Community & Southern Bank in Carrollton, Ga., founded by an investment group led by Frawley, bought $168.8 million-asset Bank of Ellijay; $248.2 million-asset First Commerce Community Bank in Douglasville; and $477.2 million-asset The Peoples Bank in Winder.
Frawley's investment group initially formed the $1.8 billion-asset Community & Southern to assume the operations of the First National Bank of Georgia when it collapsed on Jan. 29.
Frawley worked for 13 years as a regulator with the Office of the Comptroller of the Currency, and also did stints at Citizens and Southern Corp. in Georgia, Community Bank in Blountsville, Ala., Superior Bank in Birmingham, Ala., and Integrity Bank in Alpharetta, Ga.
Community & Southern will pay a 1% premium to assume all of Bank of Ellijay's $160.7 million in deposits and all of First Commerce's $242.8 million in deposits. It will pay a 1.25% premium to assume all of the $398.2 million in deposits of The Peoples Bank.
The institution agreed to buy virtually all of the assets of the three failed banks. The FDIC will share in losses with Community & Southern on approximately $602.5 million of the institutions' assets.
The failures were estimated to cost the DIF a total of $225.5 million — $55.2 million for Bank of Ellijay; $71.4 million for First Commerce; and $98.9 million for The Peoples Bank.
But Frawley was not the only well-known banker picking up failed institutions on Friday night.
Sidhu's $633.5 million-asset New Century Bank in Phoenixville, Pa., which is doing business as Customers Bank, bought $81.6 million-asset ISN Bank in Cherry Hill, N.J.
It was the second failed-bank deal for New Century, which picked up $193 million-asset USA Bank in Port Chester, N.Y., on July 9. Sidhu, the former chairman and chief executive of Sovereign Bancorp Inc., has expressed an interest in buying failed banks in the region after raising $43 million capital this year.
The acquirer did not pay a premium to assume all of ISN's $79.7 million in deposits, and agreed to buy essentially all of its assets. The FDIC will share losses with New Century on approximately $64.8 million of those assets.
The failure was estimated to cost the DIF $23.9 million.
Regulators also closed $350.5 million-asset Maritime Savings Bank in West Allis, Wis. and $47.5 million-asset Bramble Savings Bank in Milford, Ohio.
The FDIC sold Maritime Savings Bank — the first bank to fail in Wisconsin this year — to North Shore Bank in Brookfield, Wis. North Shore did not pay a premium to assume all of Maritime's $248.1 million in deposits. It agreed to purchase just $177.6 million of the thrift's assets. The transaction did not include a loss-sharing agreement.
The failure is estimated to cost the DIF $83.6 million.
The FDIC also sold Bramble Savings Bank to Foundation Bank in Cincinnati. The acquirer did not pay a premium to assume all of Bramble's $41.6 million in deposits, and agreed to buy essentially all of its assets. The transaction did not include a loss-sharing agreement.
The failure was estimated to cost the DIF $14.6 million.