Regulators shut down 3 Georgia banks, 1 each in NJ, Ohio, Wis;
makes 125 US failures this year
Regulators on Friday shut down three Georgia banks and one each in
New Jersey, Ohio and Wisconsin, boosting to 125 the number of U.S.
bank failures this year amid the tough economic climate and growing
The Federal Deposit Insurance Corp. on Friday took over the Georgia
banks: Bank of Ellijay, in Ellijay, with $168.8 million in assets;
First Commerce Community Bank of Douglasville, with $248.2 million
in assets; and Peoples Bank, based in Winder, with $447.2 million
The FDIC also seized ISN Bank in Cherry Hill, N.J., with $81.6
million in assets; Bramble Savings Bank of Milford, Ohio, with
$47.5 million in assets; and Maritime Savings Bank, based in West
Allis, Wis., with assets of $350.5 million.
Community & Southern Bank, based in Carrollton, Ga., agreed to
assume the assets and deposits of Bank of Ellijay, First Commerce
Community Bank and Peoples Bank. In addition, the FDIC and
Community & Southern Bank agreed to share losses on $602.5
million of the three failed banks' loans and other assets.
Georgia, where the meltdown in the real estate market brought an
avalanche of soured mortgage loans, has been one of the hardest hit
states for bank collapses. The failures of the three banks Friday
brought to 14 the number of Georgia banks that have fallen this
year. Also high on the list of failure-heavy states are California,
Florida and Illinois.
New Century Bank, based in Phoenixville, Pa., agreed to assume the
assets and deposits of ISN Bank. New Century Bank does business as
Customers Bank. The FDIC and New Century agreed to share losses on
$64.8 million of ISN Bank's loans and other assets.
Foundation Bank, based in Cincinnati, is assuming the assets and
deposits of Bramble Savings Bank.
And North Shore Bank, based in Brookfield, Wis., agreed to acquire
all the deposits of Maritime Savings Bank and $177.6 million of its
The failure of Bank of Ellijay is expected to cost the deposit
insurance fund $55.2 million; that of First Commerce Community
Bank, $71.4 million; that of Peoples Bank, $98.9 million; ISN Bank,
$23.9 million; Bramble Savings Bank, $14.6 million; and Maritime
Savings Bank, $83.6 million.
With 125 closures nationwide so far this year, the pace of bank
failures exceeds that of 2009, which was already a brisk year for
shutdowns. By this time last year, regulators had closed 94
The pace has accelerated as banks' losses mount on loans made for
commercial property and development. Many companies have shut down
in the recession, vacating shopping malls and office buildings
financed by the loans. That has brought delinquent loan payments
and defaults by commercial developers.
The number of bank failures is expected to peak this year and be
slightly higher than the 140 that fell in 2009. That was the
highest annual tally since 1992, at the height of the savings and
loan crisis. The 2009 failures cost the insurance fund more than
$30 billion. Twenty-five banks failed in 2008, the year the
financial crisis struck with force; only three succumbed in
The growing bank failures have sapped billions of dollars out of
the deposit insurance fund. It fell into the red last year, and its
deficit stood at $20.7 billion as of June 30.
The number of banks on the FDIC's confidential "problem" list
jumped to 829 in the second quarter from 775 three months earlier,
even as the industry as a whole had its best quarter since 2007,
making $21.6 billion in net income. Banks with more than $10
billion in assets -- only 1.3 percent of the industry -- accounted
for $19.9 billion of the total earnings.
The FDIC expects the cost of resolving failed banks to total around
$60 billion from 2010 through 2014.
The agency mandated last year that banks prepay about $45 billion
in premiums, for 2010 through 2012, to replenish the insurance
Depositors' money -- insured up to $250,000 per account -- is not
at risk, with the FDIC backed by the government. That insurance cap
was made permanent in the financial overhaul law enacted in
Written by: Marcy Gordon, AP Business Writer