FORT WALTON BEACH — White cloths bearing the words “United Fidelity Bank” were draped Monday over anything that once had identified the grandiose structure on Perry Avenue as First City Bank of Florida.
The bank, which had served Okaloosa County for almost 75 years, was shut down suddenly Friday by the Florida Office of Financial Regulation. No advance notice is provided to the public when such a closure occurs.
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Banking Dive, a website that covers banking issues, said the closing of First City Bank was the third nationally this year.
Monday, the bank’s parking lot was full and tellers were catering to the needs of drive-through customers.
But whatever was going on inside the building was most certainly not business as usual.
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The Federal Deposit Insurance Corporation, or FDIC, had been named by the state as receiver, and people were being allowed into the building by appointment only.
A Florida Highway Patrol trooper was monitoring the front door and two FDIC officers appeared outside long enough to refer a reporter’s questions elsewhere.
“Basically, we’re making sure there’s a smooth transition from the failed bank to the new institution,” said Washington-based FDIC spokeswoman Lujuan Williams-Young.
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Williams-Young referred questions about the closure to the Florida Office of Financial Regulation, which did not immediately respond to emailed questions.
First City Bank has been in financial trouble for a long time. Matt McGee, who before Friday had served on the institution’s board of directors, recalled Monday that the Northwest Florida Daily News had reported its imminent demise a decade earlier.
“They put us on the front page 10 years ago when everything was going down the tubes, but we survived another 11 years,” McGee said. “I’m proud of our legacy. We’ve done a great job of serving our community. We don’t have anything to be ashamed of.”
A FDIC notification taped to the inside of a glass door at the bank’s main entrance said the bank had been “operating with financial difficulties since 2009” and its closure was not due to economic conditions resulting from the ongoing COVID-19 pandemic.
“The failed bank experienced long standing capital and asset quality issues,” the notification said.
Directors have cited the great recession and the Deepwater Horizon Oil Spill as playing a role in the onset of First City Bank’s financial troubles.
As of June 30, the statement said, the bank, which also had a branch in Destin, held about $134.7 million in total assets and $131.4 million in total deposits. Union Fidelity, based in Evansville, Ind., “agreed to purchase essentially all of the failed bank’s assets,” according to the FDIC.
First City’s holding company filed for Chapter 11 bankruptcy Jan. 15, and that same week it was announced that Beach Community was considering buying into the business with its struggling competitor.
But when the state shut down in March, the $20 million deal fell through, McGee said.
“When COVID came, Beach Community pulled out of the thing,” he said.
Had the merger been completed, the two banks would have held $675 million in assets and been the largest community bank in Northwest Florida.
First City Bank was founded on Nov. 17, 1948, and on a wall near its entrance there is a marker where a time capsule was encased in the building in 2008. The capsule was to have been opened Nov. 17, 2048, in celebration of the bank’s 100th birthday.
“We have left mementos if the past and today and our hopes, dreams, and expectations of the future,” the marker says.