Heading for the Exits
July 26, 2016 12:50 PM
In the years after the financial crisis, as banks were collapsing left and right, the Federal Deposit Insurance Corp. agreed to cover losses tied to the sale of many failed institutions. Today, loss-share portfolios are shrinking, decreasing by 80% from early 2011, to $18.8 billion at March 31, as many banks negotiate early terminations of their FDIC agreements . Here are some notable banks that got out of their pacts.
Bank of the Ozarks, Little Rock, Ark.
The company, led by CEO George Gleason, was ahead of the curve when it came to terminating its loss-sharing agreements. In early 2015, Bank of the Ozarks reclassified nearly $28 million of FDIC-covered loans after working out a deal to be freed from seven pacts.
FCB Financial, Weston, Fla.
FCB was close behind Ozarks, hammering out a deal with the FDIC in March 2015 to be released from six agreements covering nearly $300 million in assets. The company paid the FDIC $15 million and recorded a $40 million charge.
State Bank, Atlanta
The company, led by CEO Joseph Evans, had very complex earnings, largely due to a dozen loss-share agreements, until it exited those pacts early last year . State Bank, which recorded a $15 million charge, is now solely responsible for more than $90 million in assets that once belonged to the failed banks it bought.
Talmer Bancorp, Troy, Mich.
Talmer, which had been recapitalized by a group led by W.L. Ross & Co., used that funding to buy failed banks. The company, led by CEO David Provost, paid the FDIC $11.7 million in December to get out of its loss-share deals; it agreed to sell itself to Chemical Financial a few months later.
CenterState Banks, Davenport, Fla.
The company bought six failed banks between January 2009 and January 2012. Earlier this year, CenterState, now led by CEO John Corbett, recorded a $17.5 million charge to get out of agreements associated with $187 million in loans and real estate.
First Citizens BancShares, Raleigh, N.C.
First Citizens, which is run by CEO Frank Holding Jr., bought several failed banks in far-flung states such as California, Colorado and Washington. The company recently paid the FDIC $20 million and took a $2 million charge to get out of five agreements covering $55 million in assets.
South State, Columbia, S.C.
South State, led by CEO Robert Hill Jr., took a nearly $3 million charge in the second quarter after paying the FDIC $2.3 million to end five loss-share agreements. The agreements had covered $106 million in assets.
