Security Bank, National Association, North Lauderdale, FL was closed by the Office of the Comptroller of the Currency. The FDIC, appointed as receiver, sold the failed bank to Banesco USA of Coral Gables, Florida. Under the purchase and assumption agreement between Banesco and the FDIC, all deposits of failed Security Bank will be assumed by Banesco.
Security Bank, established in 1980, was a relatively small bank with only three branches and $101 million in assets as of March 31, 2012. Poor lending decisions and collapsing real estate values in South Florida resulted in continuing losses that ultimately resulted in the Bank’s failure.
Security Bank lost money in every quarter since December 31, 2008 and the Bank was under increased regulatory scrutiny since May 2010 when the Bank signed a consent order with the Office of the Comptroller of the Currency. The holding company for Security Bank is Faro Bancorp, Inc. of Miami.
All three branches of Security Bank will reopen on Monday as branches of Banesco USA and all depositors of Security Bank will automatically become depositors of Banesco with uninterrupted FDIC deposit insurance coverage. Over the weekend, depositors of Security Bank will continue to have access to their money through the use of debit cards, ATMs and checking accounts.
Security Bank had total assets of $101.0 million and total deposits of $99.1 million at March 31, 2012. Banesco USA agreed to purchase all of the assets of Security Bank. The FDIC did not enter into a loss-share agreement with Banesco but did agree to sell the assets at a discount of $17.9 million.
Banesco USA is a fast growing and profitable South Florida bank with over $500 million in assets.
The cost to the FDIC deposit insurance fund for the failure of Security Bank is $10.8 million. Security Bank becomes the nation’s 23rd banking failure of the year and the third in Florida.