Another Week, Another Top Forty Failure

Today, twenty-seventh ranked Douglas County Bank of Douglasville, Georgia, was closed by the Georgia Department of Banking & Finance. Hamilton State Bank of Hoschton (6027th), Georgia has has agreed to assume the $314.3 million in total deposits of the former Douglas County Bank. Of the approximately $316.5 million in total assets, Hamilton State Bank has agreed only to purchase approximately $260.9 million of the failed bank's assets. Among these, the FDIC and Hamilton State Bank entered into a loss-share transaction on $159.2 million of Douglas County Bank's assets. As a result, the FDIC estimates a relatively large cost to the Deposit Insurance Fund (DIF) of $86.4 million.


In a relative surprise, 188th ranked Parkway Bank of Lenoir, North Carolina, was also closed today by its state regulators. While among the top 3% in terms of risk, the bank had projected chance of closing in the next year of less than 10%. These banks are generally more likely to be re-capitalized or sold prior to entering receivership. Frequent acquirer of failed banks, CertusBank, N.A., (1875th) of Easley, South Carolina, has agreed to assume the $103.7 million in total deposits of the former Parkway Bank. In addition it has acquired $99.2 million of the failed banks assets with the remainder of the the approximately $108.6 million retained by the FDIC for later disposition. The FDIC estimates that the cost to the  DIF will be $18.1 million.