Though private equity has largely been left out of bank failures of late, one firm found its way in this past Friday.
Hovde Acquisitions, a Washington private equity firm, used a shelf charter to pick up the $282-million-asset Bay National Bank in Baltimore, which was closed by the Office of the Comptroller of the Currency and was one of four failures on Friday.
Collectively, the four failures represent $1.1 billion in assets and will cost the Deposit Insurance Fund $160 million.
Hovde received the shelf charter in November and on Friday the Office of Thrift Supervision approved Hovde's applications for the creation of Bay Bank FSB and a holding company, which will be based in Lutherville, Md. Bay Bank assumed nearly all of Bay National's assets and $276 million of its deposits.
Bay Bank did not pay a premium on the deposits. That failure is expected to cost the fund $17.4 million.
Also in Baltimore, the OTS closed the $6.3-million-asset Ideal Federal Savings Bank.
The FDIC was unable to find a buyer for Ideal. Its failure will cost the fund $2.1 million.
Three banks have failed in Maryland this year.
