Georgia’s Community & Southern Bank picked up $800 million in deposits as it acquired three of the six U.S. banks that collapsed last week, bringing the failure count this year to 125.
Banks in Georgia, New Jersey, Ohio and Wisconsin were closed by regulators, according to statements on the website of the Federal Deposit Insurance Corp., which was named receiver. This week’s failures cost the agency’s deposit-insurance fund $347.6 million.
“Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage,” the FDIC said in each of the statements.
Banks are failing at a faster pace than last year, which saw the most failures since 1992, as real estate values remain depressed and economic recovery stays sluggish. Regulators closed 140 banks last year. The FDIC’s list of “problem” banks climbed to 829 lenders with $403 billion in assets at the end of the second quarter, a 7 percent increase from the 775 on the list in the first quarter, the FDIC said last month.
Community & Southern Chief Executive Officer Patrick Frawley paid a 1 percent premium to acquire Douglasville, Georgia’s First Commerce Community Bank, and Bank of Ellijay, based in the Georgia town of the same name, the FDIC said. The acquirer paid a premium of 1.25 percent for deposits of Winder, Georgia-based Peoples Bank.
Frawley’s bank, based in Carrollton, Georgia, is the newest bank in Georgia and had about $1.8 billion in assets and 21 branches in the west and northern parts of the state as of last month, according to a statement. The lender shared losses with the FDIC on $602.5 million in assets from the three banks.
Regulators have now closed 14 banks in Georgia this year.
In other closures, Cincinnati’s Foundation Bank bought about $41.6 million in deposits of the failed lender Bramble Savings Bank of Milford, Ohio, the FDIC said. Customers Bank of Phoenixville, Pennsylvania, acquired ISN Bank of Cherry Hill, New Jersey, the FDIC said. The FDIC will share losses on about $64.8 million of ISN’s assets.
The Office of Thrift Supervision shuttered Maritime Savings Bank of West Allis, Wisconsin, and helped arrange its sale to Brookfield, Wisconsin’s North Shore Bank. Maritime picked up $248.1 million in deposits and nine branches, the FDIC said.
The OTS reported 54 so-called problem thrifts in the second quarter, up from 50 in the prior quarter, the regulator said Aug. 25. The OTS, which supervised 753 thrifts at the end of the second quarter, will merge with the Office of the Comptroller of the Currency, overseer of national banks, as part of the Dodd- Frank regulatory overhaul law. The FDIC assumes greater regulatory responsibility under the legislation.
© Copyright 2013 Bloomberg News. All rights reserved.