Bank Grab: NAFH Buys Failed Trio from FDIC

North American Financial Holdings, a large capital pool backed by buyout shops, has bought three more failed banks from the FDIC: MetroBank of Dade County, Turnberry Bank and First National Bank of the South—from the FDIC.

It isn’t yet clear what Miami-based NAFH is paying, but the deals give it 10 branches in the Miami area and 13 branches throughout South Carolina.

Regulators shut down the three banks on July 16. The largest one is First National Bank of the South (of Spartanburg, S.C.), which had total assets of $682.0 million and $610.1 million in deposits as of March 31. MetroBank of Dade County (of Miami) had $442.3 million assets and total deposits of $391.3 million in deposits. Turnberry Bank, of Aventura, Fla., had $263.9 million in assets and $196.9 million deposits.

NAFH acquired the institutions through NAFH National Bank, its newly formed FDIC-insured national bank.

NAFH is a “blind pool” that raised $900 million with the intent to invest in troubled financial institutions. Crestview Partners was lead investor. Other NAFH sponsors include Falfurrias Capital Partners, which was founded by former Bank of America CEO Hugh McColl and ex-BofA CFO Marc Oken.

The deals are just the latest for NAFH, which last month agreed to buy a 99% stake in TIB Financial Corp. for $175 million. NAFH’s buy of TIB took longer because it needed regulatory approval for the deal, its systems and its plan, says one private equity executive. The three bank acquisitions are “bolt on” deals for TIB, the source says. It’s now easier, and quicker, for NAFH to complete a second and third acquisition, because they are a known entity and have a history with regulators, the source says.

NAFH’s management team is also littered with many former BofA executives, who are very experienced, and the firm has lots of capital. “So it’s not surprising especially as there are lots of failed institutions in Florida that regulators need to deal with,” the exec says.

NAFH’s bank transactions also cements a rather busy time for PE-backed investments. So far in third quarter, there have been eight bank deals involving private equity, according to data from Thomson Reuters. This is more than the five deals in all of second quarter, Thomson Reuters says.

Third quarter bank deal activity includes the $1.86 billion buy of First Republic from an investor group led by Colony Capital and General Atlantic. Billionaire Investor Wilbur Ross recently led a deal to buy 24.9% of Sun Bancorp for $100 million. And, Fortress Investment Group, on July 1, bought CS Financial Services.