Premier Community Bank of the Emerald Coast Closed By Regulators

The Premier Community Bank of the Emerald Coast, Crestview, Florida, was closed today by state regulators and the FDIC was named as receiver.  The FDIC sold the failed bank to Summit Bank, N.A., Panama City.  All deposits of failed Premier Community Bank were assumed by Summit Bank and depositors will have immediate access to their funds.

The two branches of Premier will reopen on Monday as branches of Summit Bank and all depositors of Premier will automatically become depositors of Summit.  Customers of Premier will continue to have full access to their money over the weekend through check writing, ATM and debit cards.

Premier had signed a Consent Order with the FDIC on January 21, 2011. Premier was ordered to implement a wide variety of financial and managerial improvements and to   submit a plan to improve capital ratios.

Ultimately, Premier was unable to raise additional capital and was overwhelmed by loan defaults.  Premier had an astronomical troubled asset ratio of 1,048% at September 30, 2011.  Almost without exception, banks that have a troubled asset ratio in excess of 100% wind up failing.

At September 30, 2011, Premier had total assets of $126 million and total deposits of $112.1 million.   Summit Bank purchased all of Premier’s assets subject to a loss-share agreement with the FDIC that covers $98 million of the asset pool acquired.  The loss-share agreement caps the losses to Summit Bank on the failed bank assets purchased.  According to the FDIC, keeping failed banking assets in the private sector minimizes the ultimate losses on the loan portfolio.

The loss to the FDIC Deposit Insurance Fund for the failure of Premier Community Bank is $31.2 million.   Premier is the nation’s 91st banking failure and the 13th in Florida.