Failure Tally Mounts as Seven More Banks Close

Print
Email
Reprints
Twitter
LinkedIn
Facebook
Google+

Regulators closed seven banks Friday, including the largest bank subsidiary of bankrupt Advanta Corp.

Resolving the banks, which held a combined $3.3 billion in assets, will cost the Federal Deposit Insurance Corp. $1.3 billion. The year's failure tally now stands at 37, or more than double the number at this point last year.

The failure of $1.6 billion-asset Advanta Bank Corp. was anticipated following the November collapse of its parent, which specialized in small-business credit cards. The failure is expected to cost $636 million, or nearly 40% of its assets. The FDIC said it could not find a buyer for the Draper, Utah-based institution. Depositors will receive their insured funds — totaling about $1.5 billion — directly. The bank had only about $247,000 in uninsured deposits.

Of the six other failures, one was a national bank, and the rest were state-chartered. Three were based in Georgia.

Regulators in the Peach State closed $1 billion-asset Appalachian Community Bank in Ellijay, $378 million-asset Bank of Hiawassee and $96 million-asset Century Security Bank in Duluth.

Appalachian's $918 million in deposits were sold to Carrollton, Ga.-based Community & Southern Bank, along with essentially all of the failed bank's assets. The FDIC and the acquirer agreed to share losses on $799 million of those assets. The failure was estimated to cost the FDIC $419 million.

Citizens South Bank in Gastonia, N.C., agreed to assume all of Bank of Hiawassee's $340 million in deposits and take over roughly all of its assets, while sharing losses with the FDIC on $233 million of those assets. The FDIC estimated the resolution's cost at $138 million.

Bank of Upson in Thomaston, Ga., agreed to assume all of Century Security's $94 million in deposits and acquire essentially all of its assets. The FDIC will share losses on $81 million of those assets with the acquirer. The resolution was estimated to cost $30 million.

Meanwhile, Alabama regulators closed $137 million-asset First Lowndes Bank in Fort Deposit. The FDIC sold all $131 million of its deposits and virtually all of its assets to First Citizens Bank in Luverne, Ala. The acquirer agreed to share losses with the FDIC on $104 million of those assets. The cost of the failure was estimated at $38 million.

Regulators in Minnesota closed $28 million-asset State Bank of Aurora. Northern State Bank in Ashland, Wis., assumed all of the failed bank's $28 million in deposits, and acquired essentially all of its assets. The FDIC and the acquirer will share losses on about $21 million of those assets. The resolution's cost was estimated $4 million.

The Office of the Comptroller of the Currency closed $70 million-asset American National Bank in Parma, Ohio. The National Bank and Trust Co. in Wilmington, Ohio, purchased all of its $67 million in deposits and roughly all of its assets. The acquirer and the FDIC will share losses on about $50 million of those assets. The resolution was estimated to cost the government $17 million.

SEE MORE IN

Marketplace
Fiserv is a leading global provider of information management and electronic commerce systems for the financial services industry.
Learn More
Informa Research Services is the premier provider of competitive intelligence, mystery shopping, and compliance testing services to the financial industry.
Learn More
CSC is a leader in private-label, third-party loan servicing with 30+ years of proven experience in delivering effective, cost-effective solutions.
Learn More
Already a subscriber? Log in here
Please note you must now log in with your email address and password.