Insured deposits of small Florida bank assumed by SunTrust
SAN FRANCISCO, Kalifornia - August 1, 2008 - First Priority Bank was shut down by regulators on Friday, making the small Florida lender the eighth bank failure in the U.S. so far this year.
Banks agreed to take on the deposits of First Priority, the Federal Deposit Insurance Corporation said in a statement late Friday. The six branches of First Priority will reopen on Monday as branches of SunTrust, it added.
At the end of June, First Priority had $259 million in assets and total deposits of $227 million. There were roughly $13 million in uninsured deposits held in about 840 accounts that potentially exceeded insurance limits, the FDIC estimated. However, this amount will probably change after the FDIC gets more information from customers.
SunTrust also bought about $42 million of the failed bank's assets. The FDIC sold another $14 million of First Priority's assets to LNV Corporation, a unit of Beal Bank Nevada. The FDIC said it will keep the remaining assets and sell them later.
This bank failure will cost the FDIC's insurance fund $72 million, the regulator estimated.
"Despite the challenges facing all banks today, the current environment also presents opportunities for strong institutions like SunTrust to expand our client base," James Wells III, chief executive of SunTrust, said in a statement.
The number of bank failures is expected to surge in coming years as the credit crunch slows economic growth and hammers some lenders that grew too fast during the recent real-estate boom.