State Bank Financial in Atlanta reached an agreement to end its loss-share agreements for 12 failed banks that it acquired during the financial crisis.
The $3.4 billion-asset State Bank will record a second-quarter, pretax charge of $15.1 million, primarily to write off its remaining indemnification asset and for settlement charges paid to the Federal Deposit Insurance Corp.
I am very pleased to close the books on our FDIC loss share agreements, which have been an incredible opportunity for us from start to finish, Joe Evans, chairman and chief executive, said in a news release. The agreement was signed on Thursday.
State Bank did not disclose a schedule for when its loss-share agreements were set to expire. The agreements were reached on banks acquired between 2009 and 2011, and loss-share agreements typically run for five years.
State Bank is the latest institution among those that were active acquirers of failed banks to agree to an early end of its loss-share agreements. Bank of the Ozarks in Little Rock, Ark., and FCB Financial Holdings in Weston, Fla., have also reached early-termination agreements.
State Bank's loss-share agreements had applied to $88.6 million in loans and $4.3 million in other real estate owned, as of March 31. The termination also eliminates the FDIC's receivable for loss-share agreements, which totaled $17.1 million and the agency's clawback-payable, which totaled $5.5 million.
As a result of the termination, State Bank's earnings will be positively impacted by the elimination of future indemnification asset amortization, lower operating expenses and our retention of 100% of future recoveries, Evans said.