FAILING BANK ACQUISITIONS
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The FDIC markets troubled institutions to healthy insured depository institutions. The FDIC is statutorily required to resolve failed institutions using the least costly resolution option minimizing losses to the Deposit Insurance Fund. The FDIC's primary objective is to maintain financial system stability and public confidence. Returning assets to the private sector in an orderly manner at the best price is another key objective. The FDIC also tries to reduce the impact on the community.
Recapitalization before failure is the preferred method to resolve open troubled open financial institutions. FDIC markets institutions in case a failing institution is not able to resolve its issues on its own. If an insured depository institution is unable to resolve its issues, the FDIC will implement its resolution process by which qualified bidders may seek to acquire the assets and assume the liabilities of the failing institution.
While qualified bidders participate in the resolution process for a variety of strategic reasons, a successful resolution can provide a seamless transition for depositors and borrowers. Qualified financial institutions may consider pursuing a failing bank acquisition for the following reasons:
- Growth - An acquirer may grow its customer base with a stable funding source.
- Purchase Earning Assets - The transactions often include a portfolio of quality loans to customers in the local market. Additionally, the acquirer assists the FDIC to resolve assets in a more efficient manner.
- Expand in Existing Markets or Enter New Markets - Acquirers assume deposits, but have the flexibility to select the offices to remain open beyond a year. The acquisition may allow the acquirer to increase locations in their desired footprints.
- Economic Stability - Help minimize the adverse effects of an institution's failure on a community by maintaining access to full service banking.
For more information, contact:
Toll-Free Number - (800) 568-9161
Main Number - (214) 754-0098
Division of Resolutions and Receiverships
1601 Bryan Street
Dallas, TX 75201-3479
Bank and Thrift Failures 2007 through First Quarter 2018
The FDIC, as deposit insurer, reviews the qualifications of potential bidders, and coordinates with the applicable federal and state regulators throughout the review process. Potential bidders are advised to contact the applicable regulators early to ensure timely reviews and determinations, as the marketing process for failing financial institutions is short.
Learn more about Regulatory qualifications in order to successfully complete a failed bank acquisition.
Regulatory Application Links:
Learn more about how the Franchise Marketing process works.
Press Releasesview all Bank Failures
Learn more about how to get included on a Franchise Marketing Bid List.
FDIC Videosview all videos
This video describes the FDIC Resolution Process from the notice of prompt corrective action through the closing.
This video explains the nature and benefits of Loss Sharing resolution transactions.