Cortez Community Bank, Brooksville, Florida, Closed By Regulators

Cortez Community Bank, Florida, became the nation’s 35th banking failure of 2011.  According to the FDIC, the failed bank will be acquired by Premier American Bank, which has previously acquired other failed banks.

Premier American Bank, National Association, Miami, Florida, acquired the banking operations, including all the deposits, of two Florida-based banks. To protect depositors, the Federal Deposit Insurance Corporation (FDIC) entered into purchase and assumption agreements with Premier American Bank, N.A.

First National Bank of Central Florida, Winter Park, Florida, was closed today by the Office of the Comptroller of the Currency, which appointed the FDIC as receiver. Cortez Community Bank, Brooksville, Florida, was closed by the Florida Office of Financial Regulation, which appointed the FDIC as receiver.

As of December 31, 2010, First National Bank of Central Florida had total assets of $352.0 million and total deposits of $312.1 million; and Cortez Community Bank had total assets of $70.9 million and total deposits of $61.4 million. Besides assuming all the deposits from the two Florida banks, Florida Community Bank will purchase essentially all of their assets.

The FDIC and Premier American Bank, N.A. entered into loss-share transactions on the failed banks’ assets. The loss-share transaction for First National Bank of Central Florida was $270.0 million; and the loss-share transaction for Cortez Community Bank was $51.3 million. Premier American Bank, N.A. will share in the losses on the asset pools covered under the loss-share agreements. The loss-share transactions are projected to maximize returns on the assets covered by keeping them in the private sector. The transactions also are expected to minimize disruptions for loan customers.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) for First National Bank of Central Florida will be $42.9 million; and for Cortez Community Bank, $18.6 million. Premier American Bank, N.A.’s acquisition of all the deposits of the two institutions was the “least costly” option for the DIF compared to all alternatives.

The closings are the 35th and 36th FDIC-insured institutions to fail in the nation so far this year and the third and fourth in Florida. Prior to today, the last bank closed in the state was Sunshine State Community Bank, Port Orange, on February 11, 2011.