SunTrust Banks Inc. said it has agreed to acquire all the deposits of Banco Latino International, the Miami unit of a failed Venezuelan bank, for an undisclosed sum.
Banco Latino International, a subsidiary of Venezuela's Banco Latino, went into Chapter 11 bankruptcy in January 1994 after its Caracas-based parent company collapsed and was taken over by Venezuelan regulators.
According to the Federal Reserve Bank of Atlanta, the Miami subsidiary's deposits dropped from $230 million at yearend 1992 to $59.4 million at June 30.
Banks have paid a median premium of 7.4% of core deposits in branch acquisitions nationwide this year, said an official with SNL Securities Inc. That compares with a 5.3% median premium paid last year.
Miami is an important financial center for Latin America and SunTrust said it hopes to use the acquisition to expand its international banking activities, including private banking and trade finance.
"This fits in perfectly with the Miami market and gives us a nice entry ticket to Venezuela," said Melissa Gracey, marketing manager for SunTrust in Miami. She added that the bank hopes to absorb most of the unit's 20 employees.
SunTrust also plans to introduce a broader range of credit-related and other banking services there, including Federal Deposit Insurance Corp. protection. In its former incarnation as an Edge Act subsidiary dealing only with nonresident deposits, Banco Latino did not offer FDIC protection.
The parent bank's collapse triggered large withdrawals at the subsidiary and prompted concern among U.S. regulators that other countries were not adequately supervising their banking industries.
The agreement to acquire Banco Latino is an unusual one for Atlanta- based SunTrust. The $47 billion-asset regional bank has refrained from making major acquisitions in recent years. Instead, the bank has preferred to grow deposits, loans and other lines of business internally and to purchase smaller banks, including Ponte Vedra National Bank near Jacksonville and Key Biscayne Bank and Trust.
The Banco Latino transaction is subject to regulatory approval and is expected to be completed by the end of the third quarter.
SunTrust does not plan to acquire any of the $96.6 million in assets at the Miami unit. Most of these assets are interbank deposits and U.S. government securities.