Four failed-bank deals announced Friday evening marked another successful night for private equity.
In at least two of the deals — for Peoples State Bank in Hamtramck, Mich., and Sunshine State Community Bank in Port Orange, Fla. — the acquirers had private-equity backing. Regulators also shuttered the $84 million-asset Badger State Bank in Cassville, Wis., and the $211 million-asset Canyon National Bank in Palm Springs, Calif. In all, the failures, which brought the year's total to 18, cost the Deposit Insurance Fund an estimated $145 million.
The operations of Peoples State, which failed with $390 million in assets, went to First Michigan Bank in Troy, Mich. Last year, the acquirer was bolstered by a $200 million capital infusion from the private equity group W.L Ross & Co., led by Wilbur Ross, and a promise of $200 million more from investors. Peoples State was First Michigan's third failed-bank pickup since April of last year.
First Michigan agreed to pay a 0.25% premium to the Federal Deposit Insurance Corp. to assume all of Peoples State's $390 million in deposits. The buyer will also acquire essentially all of the failed bank's assets, sharing losses on $331 million of those assets with the FDIC. The failure was estimated to cost the DIF $87.4 million.
Meanwhile, the $125 million-asset Sunshine State was sold to Premier American Bank. It was the third failed-bank deal for the Miami-based acquirer since the investment firm Bond Street Holdings used a shelf charter to buy Premier American — also through an FDIC-assisted deal — last year.
Premier American agreed to assume all of Sunshine State's $117 million in deposits for a 0.50% premium. The buyer will also take control of essentially all of the failed bank's assets. The failure was estimated to cost $30 million.
The FDIC sold Badger State's $78 million in deposits to Royal Bank in Elroy, Wis. Royal will also acquire roughly all of the failed bank's assets. The failure was estimated to cost $17 million.
Pacific Premier Bank in Costa Mesa, Calif., agreed to assume all of Canyon National's $205 million in deposits and acquire essentially all of its assets. The failure was estimated to cost $10 million.