As this Bloomberg article points out this was a change from most bank closings in that private capital took control of a bank. It was part of a way to get the most bidders involved so it would cost the FDIC less in loses despite having lost $4.9 billion as a result of the collapse. This was the second largest banking failure since the financial collapse began after California based Indy Mac. A consortium of large private equity firms Carlyle Group, Blackstone Group and others are putting up $900 million to take over the bank and will be responsible for some loses along with the FDIC. It was heavy involvement with the option arms and adjusted rate mortages where the loans were increasing while the properties were becoming less valuable that drove them into bankruptcy. Florida real estate has plunged even further than most of the country and it hurt the bank and its 85 branches.
Fortunately there will not be large changes to the bank or its employees anticipated. While there are no immediate layoffs or planned closings the bank has announced it is likely to close down some branches in the west coast of Florida while opening more branches closer to its home base of South Florida and Miami. The bank was able to reopen the next day and operate in a smooth manner so banking customers were generally not impacted by the actions. Also taxpayers will not be impacted as the FDIC receives its money on fees it imposes on member banks and not from taxpayer funds.
