Florida bank closed by FDIC

First Priority Bank becomes the eighth bank failure of the year. Branches will reopen as Sun Trust Bank.
By Ben Rooney, CNNMoney.com staff writer
August 1, 2008
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NEW YORK (CNNMoney.com) -- Federal regulators closed Florida's First Priority Bank on Friday, marking the eighth bank failure of the year.

The Federal Deposit Insurance Corp., which was named the receiver of the failed bank, entered into an agreement with Atlanta-based SunTrust Bank (STI, Fortune 500) to assume the insured deposits of First Priority.

All six branches of the Bradenton, Fla.-based bank will reopen on Monday as branches of SunTrust. First Priority depositors will automatically become depositors of SunTrust, the FDIC said.

First Priority had assets of $259 million and total deposits of $227 million, according to the FDIC. That includes $13 million in uninsured deposits held in approximately 840 accounts that potentially exceeded the federal insurance limits.

Account holders with more than the $100,000 insured limit will essentially "become a creditor" of the failed bank, said FDIC spokesman Andrew Gray.

Those accounts will be credited as the FDIC sells more of the failed bank's assets, Gray said.

SunTrust Bank will purchase approximately $42 million of the failed First Priority's assets, which are made up of mainly cash, cash equivalents and securities.

And LNV Corp. of Plano, Texas, a subsidiary of Beal Bank Nevada, will purchase $14 million in First Priority's assets.

The remaining $171 million in assets will be sold by the FDIC. Proceeds of these sales will be used to pay creditors including bank clients whose accounts exceed the $100,000 limit.

Customers with accounts in excess of $100,000 should contact the FDIC toll free at 1-800-837-0215.

First Published: August 1, 2008: 6:56 PM EDT
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