State regulators closed banks in Georgia, Florida and Tennessee on Friday, making June a busy month for failures.
The failures of Security Exchange Bank in Marietta, Ga., Putnam State Bank in Palatka, Fla., and Farmers Bank of Lynchburg in Tennessee, are expected to cost the Deposit Insurance Fund $100 million. The three failures bring the 2012 failure total to 31, with seven of those banks failing in June.
The Federal Deposit Insurance Corp. entered into an agreement with Clayton Bank and Trust in Knoxville, Tenn., for the $163.9 million-asset Farmers Bank. Clayton agreed to buy all of the bank's assets and assume its $156.4 million in deposits. The failure is expected to cost the Deposit Insurance Fund $28.3 million.
The FDIC has held a stake in Farmers since earlier this year when it took the $1.2 billion-asset Tennessee Commerce Bank into receivership. Tennessee Commerce's stake in Farmers stemmed from a borrower who pledged his stock in the bank and Peoples State Bank of Commerce in Nolensville, Tenn., as collateral. Tennessee Commerce took ownership of the stock last year after the borrower defaulted on his loan.
In Georgia, Fidelity Bank in Atlanta agreed to assume all of Security Exchange's $147.9 million in deposits. It also agreed to buy all of the bank's $151 million in assets, with $102.8 million of those assets covered by a loss-sharing arrangement. That failure is expected to cost the Deposit Insurance Fund $34.3 million.
In Florida, Harbor Community Bank in Indiantown agreed to assume Putnam State's $160 million in deposits and buy all of its $169.5 million in assets. Harbor Community and the FDIC entered into a loss-share agreement on $112.3 million of Putnam State Bank's assets. That failure is expected to cost the Deposit Insurance Fund $37.4 million.
Harbor Community raised $330 million in 2010 to acquire open and failed banks in Florida. It is led by Michael Brown Sr., the former chief executive of Harbor Florida Bancshares, which sold to National City in 2006 for 3.24 times its book value.
Register or login for access to this item and much more
All Bank Investment Consultant content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access