The Opportunity: Failed Bank Purchases
Many believe that the current pace of bank failures has created a once-in-a-generation buying opportunity. At year-end 2009, financial institutions with assets below a billion dollars and between one billion and ten billion were experiencing higher percentages of asset quality issues than larger banks. FDIC-facilitated acquisitions of failed whole banks provide an attractive opportunity for healthy banks to expand by acquiring failed bank deposits and assets whose risk is mitigated by the FDIC’s loss-sharing agreement.
The Problem for Community Banks
If there is so much opportunity to expand by acquiring failed banks from the FDIC, why have community banks not been more active acquirers?
Please follow the link to read the newsletter: http://www.nelsonmullins.com/newsletters/bank_notes_3-8-2010
Tags: banking, banks, FDIC, Len Rubin, Nelson Mullins
