FDIC to halt sale of Atlanta bank

By Joseph A. Giannone and Paritosh Bansal

NEW YORK (Reuters) - The Federal Deposit Insurance Corp on Friday aborted efforts to sell Silverton Bank, a failed Atlanta institution seized by regulators last month, choosing instead to liquidate amid worries the bank was losing customers too rapidly to allow a full-blown auction.

The U.S. bank regulator, charged with protecting depositors, took over Silverton on May 1 and created a "bridge" bank that kept the institution running while they solicited buyers. The FDIC on Friday said "pre-resolution" sales efforts had not resulted in any interest in Silverton.

"Prior to the FDIC's appointment as receiver, Silverton had initiated a marketing effort which was allowed to continue until a whole-bank acquisition was no longer feasible," FDIC spokesman David Barr said in an e-mailed statement.

The FDIC now plans to sell off the bank in parts. "We will ensure that sufficient time is given to smoothly transition correspondent banking services to other providers," Barr said.

Yet there was interest from at least two groups of bidders, people familiar with the situation said.

One consortium, including private equity firms Carlyle Group, Lightyear Capital, Harvest Partners and Colony Capital, had been in talks to acquire the bank for at least two weeks, people familiar with the situation told Reuters.

Washington-based Carlyle, one of the world's largest private investment firms, was part of a group that last month agreed to buy Florida's BankUnited from the FDIC.

Lightyear, led by brokerage industry veteran Donald Marron, was part of another group that last week agreed to invest $800 million into First Southern Bancorp, a healthy Florida community bank.