On Friday, the Florida Office of Financial Regulation closed Premier American Bank, headquartered in Miami, Florida, and the FDIC was named receiver. As receiver, the FDIC entered into a purchase and assumption agreement with Premier American Bank, National Association, a newly chartered national institution headquartered in Miami, Florida, and a subsidiary of Bond Street Holdings, Inc., to assume all of the deposits of Premier American Bank. The acquiring bank did not pay a premium for the deposits of the failed bank, but did issue to the FDIC a “cash participant instrument” that “serves as additional consideration for the transaction.”

This represents the first use of the OCC’s “shelf charter” mechanism to acquire a failed bank. The acquiring bank first received conditional preliminary approval from the OCC in October 2009.

As of September 30, 2009, the failed bank had approximately $350.9 million in total assets and $326.3 million in total deposits. The acquiring bank also agreed to purchase essentially all of the failed bank’s assets. The FDIC and the acquiring bank entered into a loss-share transaction on $300 million of the failed bank’s assets.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $85 million. Premier American Bank is the fifth FDIC-insured institution to fail in the nation this year and the first to fail in Florida since Peoples First Community Bank in December 2009.