Some nine months of first being on the end of formal federal government enforcement, Tennessee Commerce Bank officially ceased operations Friday.
The Tennessee Department of Financial Institutions and the Federal Deposit and Insurance Corp. put the embattled Franklin-based bank into receivership. Republic Bank & Trust Co. out of Louisville is buying all of Tennessee Commerce Bank's deposits and $204 million of its assets. Click here to see a Republic statement detailing the transaction, for which Republic officials negotiated a 47 percent discount.
The FDIC will keep the remaining assets, to be sold at a later date. Tennessee Commerce had about $1.18 billion in assets at the end of September, but reported a massive third-quarter loss that led regulators to impose strict new conditions. Since then, bank officers had been selling loans since the fall in a bid to raise enough capital to stave off its demise.
Republic Bank & Trust has assets of more than $3 billion. The company operates 37 offices in Kentucky, Ohio, Florida and Indiana. Tennessee Commerce operated only one office. Located in Franklin, it will reopen Monday as a branch of Republic, still under the Tennessee Commerce name.
The FDIC estimates the closure will cost its insurance fund $417 million. Tennessee Commerce is the first bank failure in Tennessee since Bank of Alamo ceased operations in 2002.