On Friday, the OTS closed New South Federal Savings Bank, headquartered in Irondale, Alabama, and the FDIC was named as receiver. As receiver, the FDIC entered into a purchase and assumption agreement with Beal Bank, headquartered in Plano, Texas, to assume all of the deposits of New South Federal Savings Bank. Beal Bank did not pay the FDIC a premium for the deposits of the failed bank.
As of September 30, 2009, New South Federal Savings Bank had total assets of approximately $1.5 billion and total deposits of approximately $1.2 billion. Beal Bank also agreed to purchase essentially all of the assets of the failed bank. The FDIC and Beal Bank entered into a loss-share transaction on approximately $1.2 billion of New South Federal Savings Bank’s assets.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $212.3 million. New South Federal Savings Bank is the 137th bank to fail in the nation this year and the 3rd in Alabama.