NOVA Bank, Berwyn, PA, Fails – Depositors Face Losses As FDIC Fails To Find Buyer

Large depositors of NOVA Bank, Berwyn, PA, are in a panic today
after state regulators closed the failed bank. The FDIC, acting as receiver, was
unable to find a buyer for NOVA Bank, and will pay off depositor accounts only
up to the FDIC insurance limit of $250,000.

NOVA Bank, established in 1887, had 13 branches and $432.2 million in total
deposits as of June 30, 2012. Since the FDIC was not able to find another
institution to assume the deposits of NOVA Bank, the FDIC will mail checks to
all depositors for their balance of principal and interest on insured
accounts.

The FDIC was not able to provide an estimate of depositor losses on accounts
above the $250,000 FDIC insurance limit. All accounts will be reviewed by the
FDIC to determine what level of insurance coverage applies. Customers with
uninsured balances can call the FDIC Call Center at 1-800-830-3256 to speak to a
claims agent to obtain the proper forms to submit a claim for uninsured
deposits. After the FDIC fully liquidates NOVA Bank’s assets, uninsured
depositors may be able to recoup part of their losses. Uninsured depositors have
first priority in the claims process, ahead of unsecured creditors, subordinated
debt and stockholders.

Starting Monday, depositors of failed NOVA Bank with account balances over
$250,000 can visit the FDIC web page “Is My Account Fully Insured?” to
find out if their deposits are insured.

Depositors should be ultra cautious in maintaining deposits in excess of the
FDIC insurance limit. One out of every ten banks in the country is still
classified as a “problem
bank” by the FDIC and subject to potential failure. See Is My Money Safe In A Problem Bank
and Are
My Savings Fully Insured By The FDIC for further information on how to
protect yourself from losing money in a bank failure.

The failure of the FDIC to find a buyer for a failed bank is unusual but it
does occur with enough regularity to cause depositors to be very concerned about
whether all of their savings are FDIC insured. NOVA Bank was the fourth banking
failure this year in which a buyer could not be found by the FDIC. The three
previous failed banks in which depositors lost money this year were Bank of the
Eastern Shore, MD, New City Bank, IL and Home Savings of America, MN. During
2011 the FDIC was unable to find buyers for only two failed banks.

At June 30, 2012 NOVA Bank had total assets of $483.0 million and total
deposits of $432.2 million. The FDIC will be forced to retain all assets of NOVA
Bank for later disposition. As of June 30, 2012, the FDIC had a total of $21.8
billion in failed bank assets that have still not been disposed of.

In addition to poor lending decisions and a very high level of nonperforming
loans, NOVA Bank also gained notoriety when their Chief Lending Officer, Thomas
J. Patterson, was arrested for misappropriating customer funds after a joint investigation
by the FBI and local police. Patterson later pled guilty and the FDIC issued
an Order of
Prohibition, barring Patterson from participating in the financial affairs
of any institution.

The loss to the FDIC Deposit Insurance Fund is $91.2 million. NOVA Bank
becomes the 47th banking failure of the year and the second in Pennsylvania