Florida's First National Bank of Crestview took the dubious honor this weekend of being the first FDIC-insured bank to close in 2015 as the housing crash finally caught up to it.
The closure, announced jointly by the Office of the Comptroller of the Currency (OCC) and FDIC, comes after years of increased scrutiny from regulators. OCC first filed a consent order against the Crestview bank in 2010, demanding operational changes after it uncovered what the agency called "unsafe and unsound banking practices" relating to asset quality, credit risk administration, and violations of statutes relating to real estate lending and appraisals.
Rather than improving, the bank's situation got worse, and it has earned zero stars in recent years from bank rating firm Bauer Financial.
In the end, First National Bank of Crestview was brought down by its unsafe practices, OCC said.
"[T]here is no reasonable prospect that the bank will become adequately capitalized," the regulator added.
Taking over for the failed bank is First NBC Bank in New Orleans, which has taken on all deposits (totaling $78.6 million as of the end of Q3 2014) and $62.0 million in assets.
FDIC estimates the bank's collapse will cost its Deposit Insurance Fund approximately $4.4 million.
First National Bank of Crestview is the first insured Florida bank to fail since June 2014 and only the second to fail in the last year. That compares to four banks that closed in 2013 and eight that failed in 2012.
The national tally of insured bank failures has seen a similar trend, falling from a peak of 157 in 2010 to just 18 last year.