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Central Bank of Stillwater buys failed Florida bank
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Central Bank of Stillwater, continuing to hunt for bargains among failed banks, agreed late Friday to buy a small Florida bank seized by regulators after too many of its commercial real estate loans went bad.
It was Central's fourth acquisition of a failed bank since August, and the first one outside Minnesota. Taken together, the failed banks had $700 million in assets, which means Central, which had $430 million in assets as of June, has more than doubled in size in just three months.
Central agreed to buy Commerce Bank of Southwest Florida in Fort Myers, which had $79.7 million in assets and deposits of $76.7 million, after the bank was seized by the Federal Deposit Insurance Corp. late Friday.
As part of the deal, Central Bank agreed to share losses on about $61 million of Commerce Bank's assets.
Central Bank did not pay a premium for the deposits, which suggests the FDIC had trouble finding many bidders. In many failed-bank deals, the acquiring institution pays a percentage, often 1 to 2 percent, of the failed bank's deposits.
Central also has acquired Mainstreet Bank of Forest Lake, Riverview Community Bank of Otsego and Jennings State Bank of Spring Grove, Minn. The largest of these was Mainstreet, which had $459 million in assets when it collapsed Aug. 28.
Like many failed banks, Commerce Bank had a heavy concentration of commercial real estate loans.
"Couple that with the weak real estate market in the general area where it operated, and the loan-related losses depleted earnings, causing it to fail," said Greg Hernandez, a spokesman for the FDIC.
CHRIS SERRES
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