Though private equity has largely been left out of bank failures, one firm found its way in on Friday.
Hovde Acquisitions, a Washington private equity firm, used a shelf charter to pick up the $282 million-asset Bay National Bank in Baltimore, which was closed by the Office of the Comptroller of the Currency and was one of four failures on Friday.
Collectively, the four failures represent $1.1 billion in assets and will cost the Deposit Insurance Fund $160 million.
Hovde received the shelf charter in November and on Friday the Office of Thrift Supervision approved Hovde's applications for the creation of Bay Bank FSB and a holding company, which will be based in Lutherville, Md.
Bay Bank assumed nearly all of Bay National's assets and $276 million of its deposits. Bay Bank did not pay a premium on the deposits.
That failure is expected to cost the fund $17.4 million.
Also in Baltimore, the OTS closed $6.3 million-asset Ideal Federal Savings Bank. The FDIC was unable to find a buyer for Ideal. Its failure will cost the fund $2.1 million.
Three banks have failed in Maryland this year.
The $193 million-asset USA Bank in Port Chester, N.Y., was closed by the New York State Banking Department. The FDIC sold the bank to the $504 million-asset Customers 1st Bank in Phoenixville, Pa., a bank controlled by Jay S. Sidhu, a former Sovereign Bancorp Inc. chairman and chief executive. He has expressed an interest in buying failed banks in the region after raising $43 million capital this year. Customers 1st was previously known as New Century Bank.
Customers 1st assumed USA Bank's $189.9 million of deposits without paying a premium and entered into a loss-share agreement on $159.1 million of its assets.
That failure is expected to cost the fund $61.7 million and is the third in New York this year.
The largest failure of the night was the $644.5 million-asset Home National Bank in Blackwell, Okla., which was closed by the OCC. The $1.4 billion-asset RCB Bank in Claremore, Okla., assumed all the bank's deposits, paying a 0.22% premium. It also agreed to purchase $340.7 million of its assets.
The FDIC sold $260.8 million of Home's assets to the $2.3 billion-asset Enterprise Bank & Trust of Clayton, Mo. through a loss-share agreement. The FDIC said in a press release that it will retain Home's remaining assets for later disposition.
Home's failure is expected to cost the fund $78.7 million and is the first in Oklahoma this year.