Palm Beach County's Largest Bank Fails Amidst Housing Crisis

MIAMI, FL--The South Florida real estate crash - that began back in 2007 - has claimed another financial victim: Palm Beach County’s largest locally based bank.

Lydian Private Bank (top left photo), an 11-year-old savings association with $1.7 billion in assets headquartered on the prestigious Royal Palm Way in ultra-wealthy Palm Beach Island, was seized on Aug. 19, 2011 by regulators in a failure that is estimated to cost the Federal Deposit Insurance Corp nearly $300 million.

Lydian Private Bank's deposits - totaling $1.24 billion at the end of the second quarter - and "essentially" all assets were assumed by Sabadell United Bank (middle right photo)- a nearly 40-year-old institution headquartered in Greater Downtown Miami with $2.4 billion in assets as of June 30, 2011 - in a deal arranged prior to the seizure, according to a statement by the FDIC, which insures deposits up to $250,000.

The FDIC’s deal with Sabadell United Bank - formerly Mellon United National Bank - calls for a “loss-share transaction” arrangement pertaining to $907 million of the assets of Lydian Private Bank, according to the statement.

Lydian Private Bank, an institution with a “mortgage lending specialization” serving "high net-worth clients and families" through seven-locations in five Florida counties, is the fourth Palm Beach County bank to fail since 2007, according to a CondoVultures.com analysis of FDIC data.

This latest South Florida bank failure occurred in the county that is performing arguably the worst at this point of the housing crash.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com