Historic City News has been informed by the Federal Deposit Insurance Corporation that on Friday, they have entered into a purchase and assumption agreement with Hancock Bank, Gulfport, Mississippi, to assume all of the deposits of Peoples First Community Bank, which has been ordered closed by the Office of Thrift Supervision.
The 29 branches of Peoples First Community Bank reopened during normal business hours Saturday as branches of Hancock Bank.
Depositors of Peoples First Community Bank will automatically become depositors of Hancock Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.
According to the FDIC announcement, customers should continue to use their existing branch until they receive notice from Hancock Bank that it has completed systems changes to allow other Hancock Bank branches to process their accounts as well.
Over the weekend, depositors of Peoples First Community Bank were able to access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of September 30, 2009, Peoples First Community Bank had approximately $1.8 billion in total assets and $1.7 billion in total deposits. The Hancock Bank will pay the FDIC a premium of one percent to assume all of the deposits of Peoples First Community Bank. In addition to assuming all of the deposits of the failed bank, Hancock Bank agreed to purchase approximately $1.6 billion of the failed bank’s assets. The FDIC retained the remaining assets for later disposition.
The FDIC and Hancock Bank entered into a loss-share transaction on approximately $1.4 billion of Peoples First Community Bank’s assets. Hancock 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.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $556.7 million. Hancock Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s DIF compared to all alternatives. Peoples First Community Bank is the 135th FDIC-insured institution to fail in the nation this year, and the fourteenth in Florida. The last FDIC-insured institution closed in the state was Republic Federal Bank, N.A., Miami, on December 11, 2009.