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Six Banks Fail Friday

WASHINGTON ( TheStreet) -- Regulators closed six banks in three states Friday, bringing this year's total number of bank failures to 96.

All six failed institutions were included in TheStreet's Bank Watch List of undercapitalized banks and thrifts, based on first-quarter regulatory data provided by SNL Financial.

The Federal Deposit Insurance Corp. was named receiver and found buyers for all of the failed banks, agreeing to absorb 80% of losses on the riskier asset pools acquired by other institutions. Despite numerous reports that the agency is getting tightfisted and that attractive deals for failed banks are on the wane, six 80/20 loss-sharing deals in one night show that lucrative opportunities remain for stronger banks and private-equity investors.

New Miami Bank Acquires Three Failed Institutions

Three of Friday's failed banks were located in Florida. Two of the these, along with a South Carolina bank, were acquired by North American Financial Holdings of Miami, a newly formed bank holding company led by R. Eugene (Gene) Taylor, a former vice chairman of Bank of America (BAC - Get Report). Two other former Bank of America executives are among the new holding company's senior managers, along with a former Morgan Stanley (MS) executive.

According to a company release, North American Financial raised about $900 million to invest in "failed and undercapitalized banks." The Office of the Comptroller of the Currency granted the company a bank charter on March 25, which remained "on the shelf" until Friday, when the holding company formed NAFH National Bank to acquire all assets and deposits of the failed Metro Bank of Dade County of Miami; Turnberry Bank of Aventura, Fla.; and First National Bank of the South of Spartanburg, N.C. NAFH National Bank paid no premium to the FDIC for the failed banks' deposits.

Metro Bank had $442 million in total assets when it was closed by state regulators. The FDIC agreed to share in losses on $299 million of assets acquired by NAFH National Bank and estimated the cost of Metro Bank's failure to its deposit insurance fund would be $67.6 million.

Turnberry Bank was shut down by the OTS and had $264 million in assets. The FDIC agreed to share in losses on $195 million of the assets acquired by NAFH and estimated the cost to the deposit insurance fund would be $34.4 million.

First National Bank of the South was shuttered by the OCC and had $682 million in assets, with the FDIC agreeing to share in losses on $512 million. The agency estimated the cost to the deposit insurance fund from this bank failure would be $74.9 million.
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