Bank Failure: Dominos Continue to Fall

About 400 institutions, mostly community banks, owned stock in Silverton’s holding company, Silverton Financial Services Inc. They were expected to take investment losses as a result of its failure.

WASHINGTON — Federal regulators have abandoned efforts to sell failed Silverton Bank in Georgia to investors and are shutting the temporary “bridge bank” they set up to replace it last month.

Atlanta-based Silverton, which operated as a sort of wholesale bank, fell victim to large losses on real estate construction and development loans, and was closed by regulators on May 1.

The Federal Deposit Insurance Corp., the bank’s receiver that has been running it as a bridge bank, said Friday it will begin “an orderly wind-down” of Silverton and will offer for sale its component pieces, such as individual loans and assets.

“We will ensure that sufficient time is given to smoothly transition correspondent banking services to other providers,” FDIC spokesman Andrew Gray said in a statement....Read more