FDIC might help banks bid on loans

A plan is in the works that could potentially lessen the blow to some community banks from continued fallout from Georgia’s biggest bank failure.

Federal regulators are offering a seat at the table for small community banks to bid on part of a $400 million loan portfolio originated by a unit of the failed Silverton Bank, sources familiar with the matter told Atlanta Business Chronicle.

The moves by the Federal Deposit Insurance Corp. appear to be aimed at addressing bankers’ and analysts’ fears that the pending auction could put added pressure on scores of community banks nationwide, and mortally wound one or more banks already weakened by the ongoing real estate crisis.

The FDIC had enlisted Deutsche Bank to auction off a major stake in a total loan portfolio valued at $400 million. Bids were to be accepted through April, but the deadline has been extended by a month.

The portfolio of 62 loans — including $162 million in whole loans held by Silverton, and the controlling interest in $253 million in 40 separate loan participations — is linked to 139 community banks nationwide, the Chronicle has learned.

Read more: FDIC might help banks bid on loans – Atlanta Business Chronicle