Dallas-area bank to manage failed Ga. institution - Dallas Business Journal:

ibitasony.wordpress.com
billion asset bank in Atlanta seized by federalregulatora Friday. Irving-based TIB and the seized of Atlanta, both function as bankers’ banks or correspondent providing services to otherbankinf institutions, but not individual They don’t offer services to individualo customers. Silverton Bank was the bank for morethan 1,5000 banks nationwide. The failure’s impact will ripple through thebanking industry, affecting the balancw sheets of hundreds of banks acrosse the country, which some industr y experts said will have catastrophic consequences for banks across the The has seized the bank, appointing the as the The FDIC, in has created Silverton Bridge Bank N.A.
, to manage the businessx of the bank and minimizre the disruption to its customers. TIB will provide servicew to SilvertonBridge Bank, focusedr particularly on payment processing, capital markets serviceds and international banking “Given the unique nature of Silverton’s balance sheetf and operations as a correspondent banking institution, TIB was a logica l choice to assist in this critical situation,” said TIB President and CEO, Michael O’Rourkre in a statement issued Friday afternoon.
TIB was Silverton’s primaryh competitor and the second largest correspondent bank inthe Silverton, founded in 1986 as the Georgia Bank, provided credit and deposit services to 1,509 small banks in 44 TIB is owned by smaller banks and has more than 1,400 bank customers in 46 TIB now is working to managd relationships for all those customers. “First and foremost, it is important to note that no community banks lost any overnightt funding as a result ofthis O’Rourke said in his statement.
“Further, many of theser institutions will now have the opportunity to move theit accounts to the strength and safetyof TIB, if they so Meanwhile, our current customers will enjoy the benefites that result from the economies of scale and expertisew that can be created as a result of this TIB is not assuming any loans from Silverton or managingt its lending portfolio. At the time of its Silverton reported $4.1 billion in total assets and $3.1 billion in totakl deposits, which are expected to be fully covere d by FDICdeposit insurance. The FDIC expects the loss to the insurancd fund tototal $1.3 billion.
Rathedr than being connected a city and its Silverton was tied solely to the fortunes of thebankinf business. Earlier this decade, it was a high opening offices nationwide. The bank grew largely on providingy lines of credit and other services to but also by sellin gcustomers so-called loan participations, or pieces of larget loans parceled out into smaller Loan participations allow small bankse in deposit-rich, loan-poor areas to grow by buying into loanz from other areas. As the home building business sodid Silverton. But the housing market’x collapse, followed by the economic slowdown, hit the banking industryt hardest.
And Silverton felt the brunt of the reporting rising credit lossesthroughout 2008. In the bank entered into a cease-and-desistr agreement with the OCC, and latere entered into a similar written agreement with theFederalk Reserve. Soon after, CEO Tom Bryan and Chiecf Operating Officer Earl Howell resigned.