Update | 8:29 a.m. Federal banking regulators have shuttered Silverton Bank, a small, failed Atlanta “bank of banks,” instead of selling it to a group of private equity firms, a person briefed on the matter told DealBook.
The Federal Deposit Insurance Corporation sent a letter to Silverton’s customers — mainly small community banks — on Thursday, telling them it had closed the institution down, this person said.
The move represents a bump in the road for buyout firms seeking to move into the banking sector, a push that seemed to be underway this year. A group of private equity firms, led by the Carlyle Group, had been in talks with the F.D.I.C. to acquire Silverton.
“We have to do what is least costly to our insurance fund and to shut it down for good was less costly than the bids we received,” a spokesman for the Federal Deposit Insurance Corporation told The Financial Times.
Earlier this year, IndyMac and BankUnited Financial were taken over by groups of private equity investors.
The closure of Silverton is likely to be less disruptive than those of other institutions. It accepts only deposits from other banks, not retail deposits. Those banks, primarily small community institutions, can move their deposits elsewhere with relatively less fuss.
The F.D.I.C. had seized Silverton last month, creating a bridge bank to run the institution while it sought a buyer.
– Michael J. de la Merced"