Regulators shutter Commerce Bank of Southwest Florida

Fort Myers-based Commerce Bank of Southwest Florida became the 12th Florida bank this year to be shuttered by Florida banking officials. The last FDICinsured institution closed in the state was Orion Bank, Naples, on Nov. 13.

Federal banking officials estimated that the cost to the Deposit Insurance Fund will be $23.6 million after Central Bank of Stillwater, Minn. agreed to purchase the bank and assume its deposits.

The sole branch of Commerce Bank reopened Monday as a branch of Central Bank. Depositors of Commerce Bank of Southwest Florida automatically became depositors of Central Bank and their money will continue to be insured by the Federal Deposit Insurance Corp.

Central Bank, a small Minnesota-based institution, has recently been buying up failed institutions, but this is its first venture into Florida.

As of Aug. 28, Commerce Bank of Southwest Florida had total assets of $79.7 million and total deposits of approximately $76.7 million. Central Bank did not pay a premium to assume all of the deposits of Commerce Bank, federal bankers said. In addition to assuming all of the deposits of the failed bank, Central Bank agreed to purchase essentially all of the assets.

The FDIC and Central Bank entered into a loss-share transaction on approximately $61 million of Commerce Bank of Southwest Florida’s assets. Central Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.

Commerce Bank of Southwest Florida joins a growing list of local banks that have failed this year. That list includes; Riverside Bank of the Gulf Coast, Orion Bank, Hillcrest Bank Florida and Partners Bank. 