Sunday, September 19, 2010

A Quiet Month Ends: Six Bank Failures Put Total for Year at 125

SEPTEMBER 18, 2010

By DAN FITZPATRICK, Wall Street Journal

Regulators seized six banks in the Southeast, Midwest and Northeast on Friday, marking 125 failures for 2010.

There were three in Georgia with a combined $864.2 million in assets, $801.7 million in deposits and 18 branches. Community & Southern Bank of Carrollton, Ga., assumed deposits at the three banks, agreeing to pay the Federal Deposit Insurance Corp. a 1% premium for the deposits of Bank of Ellijay and First Commerce Community Bank and a 1.25% premium for the deposits of Peoples Bank.

Community & Southern Bank also agreed to purchase virtually all assets of the failed Georgia banks and share losses with the FDIC on about $602 million of those assets.

The Georgia failures mark 14 for that state in 2010 and 45 since 2007. No state has more U.S. failures since the start of the crisis, said Alexandria,, Va.-based banking consultant Bert Ely. Other than Georgia, the largest number of bank failures since 2007 are 39 in Florida, 37 in Illinois and 32 in California.

The six failures on Friday followed three weeks during which only one bank was shut, spurring speculation that regulators had slowed down. Now "they are picking the pace back up a little bit," Mr. Ely said.

Regulators are still on pace to shut more banks this year than 2009, when 140 failed. All told, 293 banks have been seized since 2007, according to the FDIC. That total is still well short of the tally in the savings and loan crisis of 1987-1992 when over 1,000 failed.

The other banks that failed on Friday were in New Jersey, Ohio and Wisconsin. Phoenixville, Pa.-based New Century Bank assumed all deposits and agreed to purchase essentially all assets of the one-branch ISN Bank in Cherry Hill, N.J. New Century agreed to share losses on $64.8 million in ISN Bank assets.

In Ohio, Cincinnati-based Foundation Bank assumed all deposits and agreed to purchase all assets from the failed, one-branch Bramble Savings Bank of Milford, Ohio. In Wisconsin, regulators seized West Allis, Wis.-based Maritime Savings Bank, and Brookfield, Wis.-based North Shore Bank agreed to assume all of Maritime's deposits and purchase $177.6 million in assets.