Alabama insurer buys troubled Florida bank
You could say it's a sad end to the independence of Florida's oldest community bank. A Florida Panhandle bank called the Bank of Bonifay and its parent holding company, Bonifay Holding Co., were purchased by an Alabama insurance company called Protective Life Corp. But wait. There's more to this tale. (Photo courtesy of Bank of Bonifay.)
The Federal Reserve on Thursday approved Protective Life as a bank holding company, which gives the Alabama insurer access to the Fed’s emergency lending program if it needed a quick source of cash. It also would help make the company eligible to try to tap the Treasury Department’s $700-billion financial bailout program. Protective Life has $41.1-billion in assets.
Bank of Bonifay, established in 1906 in Holmes County and whose Web site boasts it is "Florida's oldest community bank," is financially troubled and earned a "zero" star (the worst possible rating) by Bauer Financial in the third quarter of 2008 (the most recent available data). Check on the bank's star rating, or that of any Florida bank here. Bonifay was one of nine "zero" star banks in Florida, so its acquisition takes some pressure off bank regulators trying to deal with a rising number of weak financial institutions in the state and country.
Bonifay is a small town near Interstate 10 west of Tallahassee and approximately due north of Panama City. With $220-million in assets, Bonifay is the 143rd largest banking institution in Florida, the Fed said. With six offices, its headquarters is located across the street from a branch of Regions Bank. Protective Life, based in Birmingham, first sought to buy the Bonifay bank in November.
“Protective Life is well capitalized,” but Bank of Bonifay’s “capital level is not considered sufficient given its current risk profile” and the transaction would improve the bank’s financial position, the Fed said Thursday.
The Treasury Department's Office of Thrift Supervision, which supervises savings institutions, said it approved applications from Hartford Financial Services Group Inc. and Lincoln National Corp. to acquire existing savings and loans and become thrift holding companies. Insurance companies that own thrifts, which are federally regulated, are also eligible to apply for a piece of the $700-billion bailout pot.
-- Robert Trigaux, Times Business Columnist