State regulators close Draper-based Advanta Bank Corp.

DRAPER — A Salt Lake County bank is the latest financial institution to close its doors.

The Federal Deposit Insurance Corp. on Friday said it has approved the payout of the insured deposits of Advanta Bank Corp., an industrial lending company based in Draper. The bank was closed Friday by the Utah Department of Financial Institutions, which appointed the FDIC as receiver, according to a news release from the FDIC.

Advanta Bank, a credit card issuer for small businesses, is the 37th FDIC-insured institution to fail this year and the third in Utah. Centennial Bank in Ogden was closed earlier this month, while Kaysville-based Barnes Bank was closed in January.

An industrial loan company or industrial bank is a financial institution that lends money but may be owned by non-financial institutions. Companies that have set up industrial banks include General Electric, General Motors, Morgan Stanley, American Express and Nordstrom.

As an industrial loan company, the institution does not cater to typical retail customers.

"These ILCs are specialty banks. … The average banking customer does not do business with them," FDIC spokesman David Barr told the Deseret News.

As of Dec. 31, 2009, Advanta Bank had approximately $1.6 billion in total assets and $1.5 billion in total deposits, according to the FDIC.

At the time of closing, the bank had an estimated $247,000 in uninsured funds. The FDIC said that figure likely will change once it obtains additional information from the bank's customers.

The FDIC was unable to find another financial institution to take over Advanta Bank's banking operations. As a result, checks to depositors for their insured funds will be mailed on Monday.

Brokered deposits will be wired once brokers provide the FDIC with the necessary documents to determine if any of their clients exceed the insurance limits. Customers who placed deposits with brokers should contact the brokers directly for more information about the status of their funds.

Customers who have questions about Friday's transaction can call the FDIC toll-free at 1-800-537-4048, beginning Monday. Customers of Advanta Bank with deposits exceeding $250,000 may visit the FDIC's Web page "Is My Account Fully Insured?" at https://www2.fdic.gov/drrip/afi/index.asp.

Advanta Bank was a wholly owned subsidiary and one of two banks operated by Avanta Corp., based in Spring House, Penn. In early November, Advanta and some of its non-bank subsidiaries filed for Chapter 11 bankruptcy protection.