Federal regulators seized Bradford Bank of Towson late Friday after the financial institution failed to find a buyer, making it the second bank in Maryland to fall victim to bad loans amid the collapse of the real estate market.
M&T Bank, which recently acquired Baltimore's Provident Bank and is one of Maryland's largest lending institutions, will assume all of Bradford's deposits and most of its assets in a purchase agreement with the Federal Deposit Insurance Corp. That means Bradford's nine branches, mostly in Baltimore County, will reopen today as M&T offices and business will go on as usual.
Bradford, founded in 1903, had $452 million in assets and $383 million in deposits as of June 30, according to regulatory filings. The deal is expected to cost the FDIC $97 million.
In late January, regulators shut down Suburban Federal Savings Bank of Crofton, Maryland's first bank failure in 17 years. Suburban's deposits were sold to the Bank of Essex in Tappahannock, Va.
The FDIC said Bradford's deposits will continue to be insured by the federal agency. Up to $250,000 per individual per account is FDIC-covered. Bradford customers can continue writing checks or using ATM cards through the weekend, the FDIC said. Checks will continue to be processed, and loan customers should make their usual payments.
"People need to be calm. They don't need to change anything," said Glenn A. Watler, an FDIC ombudsman who was at Bradford's headquarters on York Road when regulators entered the bank.
Several M&T officials gathered at the parking lot of Bradford's headquarters and nearby Towson branch before the offices closed at 6 p.m. About 60 FDIC employees entered the headquarters building and branch, where they addressed Bradford employees.
Several workers left, looking somber and declining to comment.
FDIC, M&T and Bradford officials were expected to work throughout the night and into the weekend.
On July 24, federal regulators ordered Bradford to sell itself within 30 days. The savings institution had been under heightened federal supervision since February, when the Office of Thrift Supervision issued a "cease and desist" order.
Regulators noted the thrift's aggressive loan practices, particularly in making construction loans, and said they were not properly managed. They ordered the company to stop originating commercial, construction and nonresidential real estate loans.
