SunTrust snaps up failed First Priority Bank
Triangle Business Journal
SunTrust Banks Inc. acquired $214 million in insured deposits and $42 million in total assets from failed First Priority Bank, based in Bradenton, Fla., according to a release late Friday from the Federal Deposit Insurance Corp.
Atlanta-based SunTrust (NYSE: STI), the No. 2 bank in the Triangle by deposits, will operate First Priority Bank’s six branches in the Bradenton market for 90 days, then close them. The branches will reopen Aug. 4 for customers with insured deposits.
“This is an efficient way to add clients and deposits in an attractive long-term growth market,” said Barry Koling, SunTrust spokesman.
Koling said the assets SunTrust acquired were primarily cash.
Koling added that SunTrust will continue to look to add deposits through other bank failures, as circumstances warrant.
“We’ll continue to look for attractive opportunities as they present themselves,” Koling said.
SunTrust is the third-largest bank in Bradenton, with 34 branches, $1.8 billion in total deposits and 11 percent market share, according to 2007 FDIC data. It ranks behind Bank of America (NYSE: BAC) and Wachovia Corp. (NYSE: WB) in that area.
SunTrust bought the First Priority deposits for no premium from the FDIC and will receive a cash consideration of $172 million – the amount of insured deposits minus the assets the bank bought – from the federal regulator for assuming the deposits.
There were no previously public regulatory actions against First Priority Bank. When the FDIC shut it down, First Priority had $13 million in uninsured deposits held in 840 accounts that potentially exceeded federal insurance limits.
First Priority is the first bank to fail in Florida since Guaranty National Bank in 2004. Eight FDIC-insured institutions have now been closed in 2008.
Atlanta-based Jones Day banking attorney Chip MacDonald said SunTrust’s acquisition of First Priority is indicative of the immediate future for troubled banks.
“This is the time for some of the stronger banks to be opportunistic,” he said.
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