Two More Bank Failures Make 126: Devil Goes Down to Georgia

State Bank and Trust Company is taking over two failed and seized banks in Georgia, making this the #125 and #126 closed banks in America during the financial crisis.  But this marks the 23rd bank failure in Georgia.  The FDIC and the Georgia Department of Banking and Finance have just seized yet another bank in Georgia.  The Buckhead Community Bank, based in Atlanta, Georgia, was just closed today.  The FDIC has entered into a purchase and assumption agreement with State Bank and Trust Company, based in Macon, Georgia.  First Security National Bank, based in Norcross, Georgia, was also closed today by the Office of the Comptroller of the Currency, and the four branches of First Security National Bank will reopen during normal business hours as branches of State Bank and Trust Company.

The Buckhead Community Bank clients of the six branches will now be banking clients of State Bank and Trust Company on Monday morning.  As with all reposessions so far, the deposits will continue to be insured by the FDIC.  As of November 6, 2009, The Buckhead Community Bank had total assets of about $874.0 million and total deposits of about $838.0 million.  The FDIC and State Bank and Trust Company entered into a loss-share transaction on about $692 million of The Buckhead Community Bank’s assets.  The FDIC estimates that the cost to the Deposit Insurance Fund will be $241.4 million.

First Security National Bank, based in Norcross, Georgia, was closed today by the Office of the Comptroller of the Currency, and the four branches of First Security National Bank will reopen during normal business hours as branches of State Bank and Trust Company.

As of September 30, 2009, First Security National Bank had total assets of about $128.0 million and total deposits of about $123.0 million. State Bank and Trust Company did not pay the FDIC a premium for the deposits of First Security National Bank. In addition to assuming all the deposits of the failed bank, State Bank and Trust Company agreed to purchase about $118.0 million of the failed bank’s assets. The FDIC retained the remaining assets for later disposition. The FDIC and State Bank and Trust Company entered into a loss-share transaction on about $82.4 million of First Security National Bank’s assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $30.1 million. State Bank and Trust Company’s acquisition of all the deposits was the “least costly” resolution for the DIF compared to alternatives. First Security National Bank is the 126th FDIC-insured institution to fail in the nation this year, and the 23rd in Georgia. The last FDIC-insured institution closed in the state was The Buckhead Community Bank, Atlanta, earlier today.

Another one bites the dust…. Sorry, another two.

JON C. OGG