Freedom Bank of Bradenton was closed Friday afternoon by Florida regulators and sold immediately by the Federal Deposit Insurance Corp. to Fifth Third Bank of Grand Rapids, Mich.
Freedom Bank — not to be confused with Freedom Bank of America in St. Petersburg — was a victim of lending problems and thin capital reserves. It is the second bank in Florida and 17th nationwide to fail in 2008. Another Bradenton bank, First Priority Bank, failed in August.
As an indicator of the deepening recession, only three banks failed in the country in 2007. No banks failed in 2006 or 2005.
In August, Freedom chairman Howard Seider and CEO David Zuern outlined in a letter to investors how they would revitalize the troubled bank. In September, bank regulators slapped a 21-point order on the bank to raise new capital and reserve more money against bad loans. The steps taken to meet that order were deemed insufficient, prompting the bank's seizure and sale Friday.
The four branches of Freedom Bank will reopen Monday as Fifth Third Bank. Depositors will automatically become depositors of Fifth Third and will continue to be insured by the FDIC.
Over the weekend, depositors can access their money by writing checks or using ATM or debit cards. Checks will continue to be processed, and loan customers should make payments as usual.
Freedom had assets of $287-million and deposits of $254-million. Fifth Third agreed to assume all the deposits for a premium of 1.16 percent, and will purchase $36-million of assets.
The FDIC will retain the remaining assets for later disposition, to help defray the estimated cost of the bank's failure to the FDIC deposit insurance fund of between $80-million and $104-million.