Integra Bank in Evansville, Ind., was closed by the Office of the Comptroller of the Currency, after fighting to survive for nearly two years.
The failure of the $2.2 billion-asset Integra, along with the seizures of Virginia Business Bank in Richmond and BankMeridian in Columbia, S.C., earlier in the evening, brought the 2011 failure tally to 61. The three failures are expected to collectively cost the Deposit Insurance Fund $253.4 million.
The Federal Deposit Insurance Corp. struck a deal with the $8.1 billion-asset Old National Bank, also based in Evansville, to take over Integra. Old National agreed to pay a 1% premium to assume Integra's $1.9 billion in deposits. Old National also agreed to buy essentially all of the failed bank's assets, with $1.2 billion of those assets covered by a loss-share agreement. Integra's failure is expected to cost the Deposit Insurance Fund $170.7 million.
Integra entered the economic downturn as a possible acquirer. In 2007, it agreed to buy Peoples Community Bancorp Inc. of West Chester, Ohio, but that deal was terminated in early 2008 as Peoples' credit quality deteriorated. Soon, Integra began feeling stress in its own loan book, particularly in a Chicago construction portfolio.
By the summer of 2009, Integra entered into an enforcement order with the OCC to improve its condition and it spent the next year selling branches to reduce assets and raise capital. Its holding company, Integra Bank Corp., began expressing doubt about its ability to continue as a going concern earlier this year as it moved into a negative equity position.
Old National had long been viewed as a likely acquirer of Integra once it failed. In June, Old National acquired Integra's wealth management division. Old National, which reports second-quarter earnings Monday, said in a press release Friday that adding Integra's 52 branches would make it the fourth-largest deposit holder in Indiana.
Earlier in the evening, the OCC closed the $239.8 million-asset BankMeridian. The FDIC sold the bank's assets to SCBT, the bank unit of SCBT Financial Corp. in Columbia, S.C. The FDIC agreed to share in the losses with SCBT on $179 million of the assets. SCBT also agreed to assume the failed bank's $215.5 million in deposits.
That failure is expected to cost the Deposit Insurance Fund $65.4 million.
The Virginia State Corporation Commission closed the $95.8 million-asset Virginia Business Bank. The FDIC entered into agreement with Xenith Bank, also in Richmond, to buy the bank's assets and assume its $85 million in deposits. That failure is expected to cost the Deposit Insurance Fund $17.3 million.