Sun American Bank, a Boca Raton based institution with $536 million in assets and 15 South Florida locations, was seized by regulators on Friday, March 5, causing a nearly $104 million loss for the Federal Deposit Insurance Corp, according to a new report from CondoVultures.com.

Sun American Bank is the fourth Florida bank to fail in 2009, pushing Florida into a tie with Washington for the state with the greatest number of shuttered institutions this year, according to the report based on data from the FDIC, whcih insures accounts up to $250,000.

"Industry experts are on record predicting that 20 banks will fail in Florida in 2010 alone," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "If the experts are correct, Sun American Bank's failure means another 16 Florida banks are likely to be shuttered in the remaining 10 months of 2010 for an average of 1.6 failures per month.

"This is important for buyers of distressed real estate and notes as the acquirers of the failed banks typically look to offload their newly obtained troubled assets in a quick manner."

In preparing to seize Sun American Bank, the FDIC found a suitor for the failed bank's assets and deposits in First Citizens Bank & Trust Co. in Raleigh, N.C. First Citizens Bank & Trust is a 112-year-old institution with $15.8 billion in assets, $10.5 billion in loans, and 391 locations in eight states, excluding Florida.

 "First-Citizens Bank & Trust Co. did not pay a premium to acquire the deposits of Sun American Bank," according to an FDIC statement. "In addition to assuming all of the deposits of the failed bank, First-Citizens Bank & Trust Co. agreed to purchase essentially of the assets" of Sun American Bank.

Founded in 1987, Sun American Bank employed 118 people at the institution's eight offices in Palm Beach County, five locations in Miami-Dade County, and two offices in Broward County.

Sun American Bank was created through a series of acquisitions of distressed South Florida banks including Miami's PanAmerican Bank in 2001, Miami's Gulf Bank in 2004, and Beach Bank in Miami Beach in 2006, according to the FDIC.

At the end of 2009, Sun American Bank had $405 million in loans compared to $466 million in 2008. The bank's portfolio was comprised of comprised of real estate loans, commercial and industrial business loans, and personal loans.

In 2009, Sun American's noncurrent-loans-to-loans ratio spiked to $71.7 million compared to $25.9 million in 2008 and $6.7 million at the end of 2007. The noncurrent loans contributed to the bank losing $40.9 million in 2009, according to the report.

The 2009 surge in troubled loans was led the bank's construction and development loans, of which 39.5 percent were noncurrent, and commercial and industrial business loans, of which 39.6 percent were noncurrent. Nearly 12 percent of the bank's commercial real estate loans were also noncurrent, according to the report.

There have been now been 20 bank failures in Florida since 2008, producing a combined loss of $2.4 billion for the FDIC. The failed Florida banks had combined assets of $13.4 billion and deposits of $9.4 billion.

Regulators shut 14 institutions in Florida in 2009, and an additional two institutions in 2008, according to the report.

For 2010, regulators have shuttered 26 U.S. institutions with $1.9 billion in assets and $1.7 billion in deposits. The failures have produced an estimated loss of $580 million for the FDIC's Deposit Insurance Fund.

In 2009, regulators shut 140 institutions with $170 billion in assets and $136 billion in deposits causing an estimated loss of $2.4 billion for the FDIC, according to the report.

Georgia led the nation in bank failures in 2009 with 25. Illinois ranked second with 21 failures, and California was third with 17 closings.

Rounding out the top five states for bank failures was Florida with 14 closings and Minnesota with six closings. Overall, banks failed in 34 states including Alabama, Kansas, South Dakota, and Wyoming, according to the report.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or view our Video Gallery. Looking for bulk projects direct from developers or lenders? Visit the Condo Vultures® Bulk Deals Database. Our new books, the Official Condo Buyers Guide to Miami™ , Official Condo Buyers Guide To South Beach™, Official Condo Buyers Guide to Sunny Isles Beach™, Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and the First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

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