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Overview

Qualified insured depository institutions may be offered opportunities to acquire potentially failing institutions marketed by the �౦��Ϸ����. After executing a confidentiality agreement, interested bidders are granted access to failing institution information to conduct due diligence and review the �౦��Ϸ���� transaction terms. The �౦��Ϸ���� conducts a sealed, competitive bid process and evaluates bids against the �౦��Ϸ����’s cost of liquidation and the cost of other bids.

The �౦��Ϸ���� does not publish lists of potentially failing institutions, as this information is a confidential regulatory matter. Invitations to access information about a specific acquisition opportunity are extended only to qualified institutions that meet regulatory, total asset, and geographic criteria.

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Resolution Process

The �౦��Ϸ���� resolves failing financial institutions in the least costly manner to the Deposit Insurance Fund (DIF) while minimizing disruption to depositors and customers of failed institutions.

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Chartering Authority Role

The decision to close an institution is determined primarily by its chartering authority, not the �౦��Ϸ����. For institutions offered as acquisition opportunities, not all of these institutions fail. These open institutions and operating entities can improve their condition and prevent failure during the marketing process.

Acquisition Opportunities

The �౦��Ϸ���� does not publish lists of potentially failing institutions, as this information is a confidential regulatory matter. Invitations to access information about a specific acquisition opportunity are extended only to qualified institutions that meet regulatory, total assets, and geographic criteria.

Marketing Process Duration

The marketing process begins when qualified institutions are notified of an acquisition opportunity. It generally lasts between 50 to 70 days in cases of capital failures, but may conclude more rapidly if the chartering authority determines the institution must be closed sooner.

Liquidity issues, or other situations affecting a bank’s viability, may result in an accelerated failure that occurs in a matter of days.

Due Diligence

Provided sufficient marketing time, interested bidders may conduct due diligence to value assets and formulate bids. All parties performing due diligence have equal time and access to the failing institution’s information and personnel.

Regulatory Approvals

Qualified insured depository institutions must also obtain regulatory approval to bid on a failing institution and are encouraged to seek regulatory approval early in the marketing process. The �౦��Ϸ���� notifies regulators of institutions interested in bidding, and verifies regulatory approval.