FDIC takes over First National Bank after it fails, will reopen as PlainsCapital

[douglas9]

EDINBURG — Dallas-based PlainsCapital Bank is set to assume the assets of the First National Bank of Edinburg, according to a statement issued late Friday by the Federal Deposit Insurance Corporation.

No representatives of either First National Bank or Plains Capital Bank would comment on the transaction.

PlainsCapital today will open all First National Bank’s branches, including 27 in the Rio Grande Valley, the FDIC said.

First National Bank’s customers will have access to their money through checking accounts, ATM cards and debit cards, the FDIC said, and checks drawn on the bank will be processed as usual.

Customers’ deposits are insured up to $250,000 per account.

The FDIC also said customers should continue making payments on loans.

As of June 30, 2013, First National Bank had approximately $3.1 billion in total assets and $2.3 billion total deposits, the FDIC statement said.

The agency estimates that the insurance fund will pay $637.5 million to cover First National Bank’s loss in asset values, and Plains Capital’s acquisition “was the least costly resolution.”

For PlainsCapital, the acquisition of First National’s 51 branches more than doubles its number of branches across Texas. It is the bank’s first successful acquisition of a failed bank put up for bid by the FDIC, said Jeremy B. Ford, president and CEO of Hilltop Holdings, parent of PlainsCapital.

http://www.themonitor.com/news/local/article_78680554-1cce-11e3-9fd5-001a4bcf6878.html

[TexasTowelie]

1. It finally happened.

Here is the post that I made in January regarding the bank:

Texas-size troubles for the state's No. 12 bank (Edinburg)
http://www.democraticunderground.com/10785632

Let's hope that nobody got caught by surprise.

[douglas9]

2. Regulators Seize Biggest Failed Bank in 3 Years

Bank failures are apparently not just reserved for the smallest institutions.

Regulators seized the largest institution to be closed in over three years late Friday. The Office of the Comptroller of the Currency shuttered the $3.1 billion-asset First National Bank in Edinburg, Texas, and it was sold by the Federal Deposit Insurance Corp. in a deal estimated to cost $637 million to the Deposit Insurance Fund.

It followed the closure earlier in the day of The Community's Bank, a $26 million-asset institution in Bridgeport, Conn., which was the first bank to fail in the state in 11 years. A total of 22 institutions have failed so far this year.

First National's closure, which came after eight straight quarters of reported losses for the bank, broke an extended pattern of only banks with less than $1 billion in assets being declared insolvent. It was the largest failure since April 30, 2010, when the FDIC seized both Westernbank Puerto Rico and R-G Premier Bank of Puerto Rico, with asset sizes, respectively, of $8.6 billion and $4.2 billion. The last failure of a bank to hit the billion-dollar cutoff was that of Tennessee Commerce Bank, in Franklin, Tenn., which failed in January 2012 with just over $1 billion in assets.

snip>

Meanwhile, regulators could not find a buyer for the operations of the bank that failed earlier in the day. The FDIC said it would mail a check for only the insured deposits of the customers of The Community's Bank. The bank failed with nearly $26 million in total deposits, and the FDIC said it would determine the amount of uninsured deposits after it obtains additional customer information. The failure was estimated to cost $7.8 million to the DIF. The last bank to fail in the state was Connecticut Bank of Commerce, in Stamford, which was closed in June 2002.

http://www.americanbanker.com/issues/178_178/regulators-seize-biggest-failed-bank-in-3-years-1062053-1.html