Regulators Seize United Western Bank and Three Others

Federal regulators took control of ""United Western Bank"":http://www.uwbank.com/ over the weekend after losses in 2009 and 2010 left the Denver-based bank ""undercapitalized and in an unsafe and unsound condition to transact business,"" according to the ""Office of Thrift Supervision"":http://www.ots.treas.gov/?p=PressReleases&ContentRecord_id=aa8c2cb0-b6d7-ae90-e3dc-6fbe3adf8e3a (OTS). The bank's parent company says the move will likely push it into bankruptcy.
[IMAGE] United Western Bank had assets of $2.05 billion, deposits of $1.65 billion, and 161 employees. In addition to the home office in Denver, it operated seven branch locations throughout Colorado.

The FDIC was named receiver of the failed institution and immediately brokered a deal with ""First-Citizens Bank & Trust Company"":https://www.firstcitizens.com/, headquartered in Raleigh, North Carolina, to take over United Western's operations. All deposits have been transferred to First-Citizens and United Western locations reopened as branches of First-Citizens Monday morning.

First-Citizens also agreed to purchase all of United Western's assets. The FDIC has agreed to share future losses on approximately $1.11 billion of the acquired assets.

United Western Bancorp, the holding company whose primary subsidiary was the now-defunct United Western Bank, has issued a statement in which it described the seizure as ""surprising"" and ""disappointing,"" considering the company's ""extensive efforts to recapitalize itself and the bank.""

According to United Western Bancorp, at the date of the seizure by the OTS and FDIC, the company had written commitments for the investment of $149 million and had received strong indications of interest in excess of $70 million.

Guy A. Gibson, the company's board chairman, said, ""We were making steady progress with regard to completing our capital formation efforts and were within sight of the completion of our $200 million raise. This precipitous action by the OTS and the FDIC will ultimately cause an unnecessary loss to the [FDIC's] deposit insurance fund, since our private market solution was near at hand.""

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The FDIC says the closing of United Western Bank will cost its insurance fund an estimated $312.8 million.

Following the seizure of its banking subsidiary, United Western Bancorp says it is exploring its options and will consider all alternatives to protect and maximize the value of its remaining assets.

""The company and certain of its subsidiaries and affiliates may be required to seek protection under the federal Bankruptcy Code in order to seek a reorganization or pursue an orderly liquidation of those assets,"" United Western Bancorp said.

Gibson says his company will work with the NASDAQ Global Market to determine whether it is possible to maintain the company's stock listing on that market, but he views this as ""unlikely"" and says trading may be suspended as a result of the FDIC appointment.

Three other smaller community-based lenders were also shut down over the weekend. ""Enterprise Banking Company"":http://www.enterprisebankingco.com/ in McDonough, Georgia, was closed by state regulators. The FDIC was unable to find a buyer for the failed institution.

Enterprise Banking Company had $95.5 million in total deposits and assets worth $100.9 million. Its closing is expected to cost the FDIC's insurance fund $39.6 million.

In Easley, South Carolina, it was ""CommunitySouth Bank and Trust"":http://www.communitysouthbankandtrust.com/ that found regulators at its doors Friday evening. CommunitySouth had six branch locations, with $402.4 million in deposits and $440.6 million in assets.

The FDIC reached an agreement with ""CertusBank, N.A."":http://www.certusbank.com, a newly-chartered bank subsidiary of ""Blue Ridge Holdings, Inc."":http://www.bhc.us.com/ in Charlotte, North Carolina, to assume all of the deposits of CommunitySouth Bank and Trust and purchase ""essentially all"" of the failed institution's assets.

The FDIC and CertusBank entered into a loss-share transaction on $211.3 million of CommunitySouth's assets. The failure will cost the FDIC an estimated $46.3 million.

""The Bank of Asheville"":https://www.bankofasheville.com/ in North Carolina was also closed by its state regulator. It operated five branches, with $188.3 million in deposits and assets totaling $195.1 million.

""First Bank"":http://www.firstbancorp.com, in Troy, North Carolina, acquired the failed institution in an FDIC-assisted transaction. The federal agency agreed to share losses on $166.3 million of the acquired assets. The closing is expected to cost the FDIC $56.2 million.

With this latest round of closings, regulators have shuttered seven FDIC-insured institutions so far this year.