First Prority Bank based in Florida is seized by FDIC

August 3, 2008 by · Leave a Comment
Filed under: Bank Failure, Industry News 

Look like we have the 8th failure this year. First Priority of Florida has been overseen by FDIC and Sun Trust Banks will resume access to teller, check, debit card and atm. With the current economic environment with banks de-leveraging their balance sheets and asset being written down that some banks will find them selves in trouble with not enough capital to stay prudently solvent. Here is the report from Reuters.

Release:

Bank regulators closed a small Florida-based bank on Friday, the eighth U.S. bank to fail this year under pressure from a weak economy and a credit crisis precipitated by falling home prices.

The Federal Deposit Insurance Corp said First Priority Bank had $259 million in assets and $227 million in deposits and its failure will cost the federal fund that insures deposits an estimated $72 million.

SunTrust Banks has agreed to assume the insured deposits of First Priority, whose six branches will reopen Monday as branches of SunTrust Bank.

Customers can access their money over the weekend by check, teller machine or debit card, the FDIC said.

It is the first bank to fail in Florida since Guaranty National Bank of Tallahassee failed in March 2004, according to the FDIC, which blamed the failure on exposure to the real estate market, predominantly in the construction lending area.

Florida is among several states whose housing markets have seen the sharpest declines.

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