A crippled Pawleys Island bank that failed Friday will be merged into the largest lender based in the Charleston region by the time the weekend is over.
Plantation Federal Bank was shut down by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corp. as receiver. The FDIC negotiated a deal to have First Federal of Charleston to take over all of the deposits and assets, including six branches.
The offices are expected to reopen Monday morning under the First Federal name, including the three Greenville-area locations operating as First Savers Bank. Plantation Federal had three coastal branches in Pawleys Island, Murrells Inlet and Myrtle Beach.
Federal regulators seized the severely undercapitalized lender after finding it “had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices,” according to a written statement. They also determined that the bank was likely to incur more losses, further depleting its capital and diminishing its chances for survival.
The failed bank had $486 million in assets, loans totaling $349 million and about $441 million in deposits.
First Federal chief executive Wayne Hall said the customer base of Plantation Federal and First Savers “was a significant attraction to our company in considering this transaction.”
“This is strategically beneficial to First Federal as we enter the Greenville market and expand our current presence in the Grand Strand market, which includes Pawleys Island, Murrells Inlet and Myrtle Beach,” Hall said in statement Friday.
The FDIC estimated the failure will cost its Deposit Insurance Fund about $76 million.
Plantation Federal was the 21st FDIC-insured lender to fail in the nation this year, and it was the first for 2012 in South Carolina. The last bank in the state to be shut down was Columbia-based BankMeridian, NA, which was seized July 29.
All deposits at Plantation Federal and First Savers will continue to be insured by the FDIC, which advised affected customers to use their existing branches until they are notified by First Federal that it has completed the necessary systems change.
Depositors can access their money through normal channels this weekend. Checks will continue to be processed, and borrowers of the failed bank should continue to make payments.
Customers with questions can call 1-800-640-2538. The number will be operational today from 9 a.m. to 6 p.m.; on Sunday from noon to 6 p.m.; on Monday from 8 a.m. to 8 p.m. Afterward, the help line will be available weekdays from 9 a.m. to 5 p.m.