FDIC takes over, sells Bank of Bonifay [Jackson County Floridan, Marianna, Fla.]

May 11--The Bank of Bonifay was closed Friday by state regulators, who turned it over to the Federal Deposit Insurance Corporation.

In order to protect depositors, the FDIC brokered a sale to Lake City-based First Federal Bank of Florida to assume all the bank's deposits.

Customers of the Bank of Bonifay are now customers of First Federal Bank, as of Monday. FDIC officials say all deposits should be secure.

According to an FDIC press release, the five branches of the Bank of Bonifay reopened Monday as First Federal branches. Customers have been asked to continue to use their existing branch until they receive notice from First Federal Bank of Florida that it has completed system changes, to allow other First Federal Bank of Florida branches to process their accounts as well.

As of March 31, the Bank of Bonifay had about $249.2 million in total assets, and $230.2 million in total deposits. First Federal Bank will purchase about $78.7 million of the Bank of Bonifay's assets; the rest will be held by the FDIC. The FDIC's Deposit Insurance Fund is to cover $78.7 million.

Officials of both banks were unavailable for comment Monday.

The Bank of Bonifay is the 65th bank to fail in the nation this year, and the tenth in Florida.

In 2008, a new management team was brought in to the Bank of Bonifay to address problems cited in a state-issued "cease and desist" order, calling for changes in certain practices at the bank that regulators deemed "unsafe and unsound."

After the order was issued, bank officials signed a consent order agreeing to make several changes, but "without admitting or denying any violations of laws, regulations, or rules, and without admitting or denying having engaged in any unsafe or unsound practices," the document stated.

The new management team was led by Mike Medley and his father, Guy F. Medley. The two weren't new to the bank at the time; they owned it from 2001 to 2005.

The elder Medley came out of retirement to take on the challenge.

In January 2009, an Alabama life insurance company, Protective Life Corporation, announced it intended to purchase Bank of Bonifay, pending regulators' approval. However, that purchase did not go through.

Bank of Bonifay had a branch in Jackson County, just north of Marianna, which was closed last year.

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Copyright (c) 2010, Jackson County Floridan, Marianna, Fla.

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