The Federal Deposit Insurance Corp. reported the closing of two banks Friday, making them the 24th and 25th banks to be closed this year. Fortunately, banks in the Fort Smith region don’t appear to be headed for such ignominy based on their third quarter financial reports.
• Haven Trust Bank, Duluth, Ga, was closed by the Georgia Department of Banking and Finance, and the FDIC was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Branch Banking & Trust (BB&T), Winston-Salem, N.C.
As of December 8, 2008, Haven Trust had total assets of $572 million and total deposits of $515 million. BB&T agreed to assume all of the deposits for $112,000. In addition to assuming all of the failed bank's deposits, BB&T will purchase approximately $55 million of the failed bank's assets. The FDIC will retain the remaining assets for later
The FDIC estimates that the cost to the Deposit Insurance Fund will be $200 million. The last bank to be closed in the state was First Georgia Community Bank, Jackson, Ga., on Dec. 5, 2008.
• Sanderson State Bank, Sanderson, Texas, was closed Friday by the Texas Department of Banking, and the FDIC was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with The Pecos County State Bank, Fort Stockton, Texas, to assume all of Sanderson State Bank's deposits, including those that exceeded the deposit insurance limit.
As of December 3, 2008, Sanderson State Bank had total assets of $37 million and total deposits of $27.9 million. The Pecos County State Bank agreed to assume all of the deposits for a .55 percent premium. In addition to assuming all of the failed bank's deposits, The Pecos County State Bank will purchase approximately $3.8 million of assets, and have the option to purchase owned premises and equipment. The FDIC will retain the remaining assets for later disposition.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $12.5 million. The Pecos County State Bank's acquisition of all the deposits was the least costly resolution for the FDIC's Deposit Insurance Fund compared to alternatives. The last bank to be closed in the state was Franklin Bank, SSB, Houston, TX, on Nov. 7, 2008.
Also on Friday, FDIC Chairwoman issued a third quarter report on the national banking sector.
“Despite the continuing downturn in the housing market, the on-going turmoil in the nation’s financial sector and the resulting liquidity crisis, the vast majority of FDIC-insured institutions remain well capitalized. The FDIC, along with the Treasury and the Federal Reserve, has taken unprecedented steps to bolster public confidence in our financial institutions and in the U.S. economy,” Bair noted in the report.