Miami Bank Gets Short Reprieve
Federal regulators have extended the deadline for submitting bids to take over Southeast Banking Corp. until next Thursday, giving the troubled banking company an extra three days to continue its last-ditch efforts to raise private capital.
A lawyer representing one of the bidders described the deadline extension as "just part of the negotiation process." He said the Federal Deposit Insurance Corp. revised some of the terms of the deal after talking to bidders.
"They [the regulators] have a new term sheet out," the source said. "They are changing the deal in response to comments by bidders."
The original deadline for submitting bids on Southeast was Sept. 4, but it was later extended five days until Monday. An FDIC spokesman said the agency's policy is not to comment on matters involving open institutions.
|Closed Bank' Basis
The FDIC is said to be soliciting bids for Southeast on a "closed bank" basis, whereby federal regulators would actually seize the institution before selling it to the highest bidder, as occurred last year with Bank of New England Corp.
Southeast officials are understood to be meeting with private investors to negotiate a capital infusion on an "open bank" basis, which would include federal assistance but not entail closing the bank and wiping out shareholders.
Potential bidders to acquire Southeast on a closed bank basis are said to include Barnett Banks Inc., Jacksonville; First Union Corp., Charlotte; NCNB Corp., also of Charlotte; and Sun Trust Banks Inc., Atlanta.
Southeast, with $11.3 billion in assets, lost $147.2 million in the second quarter, its seventh consecutive quarterly loss.
Capital ratios are below regulatory guidelines and liquidity problems have driven it to the Federal Reserve Bank of Atlanta's discount window, where its daily borrowings have been as high as $275 million.
Barbara A. Rehm in Washington contributed to this article.