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

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billion asset bank in Atlanta seized by federalregulators Irving-based TIB and the seized of Atlanta, both function as banks or correspondent banks, providing servicexs to other banking but not individual customers. They don’t offer service s to individual customers. Silverton Bank was the bank for morethan 1,5090 banks nationwide. The failure’s impact will ripple through thebankingb industry, affecting the balance sheets of hundreds of banks acrosxs the country, which some industry expert said will have catastrophic consequences for banke across the Southeast. The has seized the bank, appointingf the as the receiver. The FDIC, in turn, has created Silverton BridgeBank N.A.
, to manags the business of the bank and minimize the disruptiojn to its customers. TIB will provide servicees to SilvertonBridge Bank, focused particularly on paymenty processing, capital markets services and international banking “Given the unique nature of Silverton’s balancw sheet and operations as a correspondent bankinhg institution, TIB was a logical choice to assist in this criticakl situation,” said TIB President and CEO, Michaelo O’Rourke in a statement issuexd Friday afternoon. TIB was Silverton’s primaryh competitor and the second larges t correspondent bank inthe country.
founded in 1986 as the Georgia Bankers’ provided credit and deposit servicedsto 1,500 small banks in 44 TIB is owned by smaller banks and has more than 1,40 0 bank customers in 46 TIB now is working to manage relationships for all thoss customers. “First and foremost, it is importantt to note that no community bankss lost any overnight fundingy as a result ofthis event,” O’Rourke said in his “Further, many of these institutione will now have the opportunity to move theie accounts to the strength and safety of TIB, if they so Meanwhile, our current customers will enjoy the benefits that result from the economies of scale and expertise that can be created as a result of this transaction.
” TIB is not assuming any loanss from Silverton or managing its lending portfolio. At the time of its Silverton reported $4.1 billion in total assets and $3.1 billion in total deposits, which are expectede to be fully covered by FDICdeposir insurance. The FDIC expects the loss to the insurance fund tototapl $1.3 billion. Rather than being connected a city and its Silverton was tied solely to the fortunews of thebanking business. Earlier this it was a high flyer, opening offices nationwide.
The bank grew largely on providinyg lines of credit and other serviceesto banks, but also by selliny customers so-called loan participations, or piece s of larger loans parcelesd out into smaller chunks. Loan participations allowe small banksin deposit-rich, loan-poor areas to grow by buyinb into loans from other areas. As the home buildinb business boomed, so did Silverton. But the housingg market’s collapse, followed by the economic hit the banking industry And Silverton felt the brunt of the reporting rising credit lossesthroughout 2008.
In February, the bank enteredf into a cease-and-desist agreement with the OCC, and late entered into a similar written agreement with theFederaol Reserve. Soon after, CEO Tom Bryan and Chievf Operating Officer EarlHowell