Using cutting edge research, this blog predicts and comments on the probability of failure for the nearly 7000 regulated banks monitored by the Federal Reserve. While most depositors may be protected by the FDIC, the importance of bank survival is still very important to bank clientele with lines of credit, mortgages, loans or other forms of financing. We seek to inform people that they might be at risk.
Friday, April 26, 2013
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.