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Banks closed in Fla, Ga; 83 have failed in 2011

Banks closed in Fla, Ga; 83 have failed in 2011

October 22nd, 2011 in News

WASHINGTON (AP) - Regulators on Friday closed two small banks in Georgia and one in Florida, raising to 83 the number of U.S. bank that have failed this year

The number of closures has fallen sharply this year as banks have worked their way through the bad debt accumulated in the recession. By this time last year, regulators had shuttered 139 banks.

The Federal Deposit Insurance Corp. seized Community Capital Bank in Jonesboro, Ga., with $181.2 million in assets and $166.2 million in deposits; Decatur First Bank, based in Decatur, Ga., with $191.5 million in assets and $179.2 million in deposits; and Old Harbor Bank, based in Clearwater, Fla., with $215.9 million in assets and $217.8 million in deposits.

State Bank and Trust Co., based in Macon, Ga., agreed to assume the assets and deposits of Community Capital Bank. Atlanta-based Fidelity Bank agreed to acquire the assets and deposits of Decatur First Bank, while 1st United Bank, based in Boca Raton, Fla., is assuming the assets and deposits of Old Harbor Bank.

In addition, the FDIC and State Bank and Trust agreed to share losses on $141.3 million of Community Capital Bank's loans and other assets. The agency and Fidelity Bank are sharing losses on $111.5 million of Decatur First Bank's assets. The FDIC and 1st United Bank are sharing losses on $155.6 million of Old Harbor Bank's assets.

The failure of Community Capital Bank is expected to cost the deposit insurance fund $62 million. The failure of Decatur First Bank is expected to cost $32.6 million; that of Old Harbor Bank, $39.3 million.

Georgia and Florida have been among the hardest-hit states for bank failures. Regulators closed 16 banks in Georgia and 29 in Florida last year. The failures of Community Capital Bank and Decatur First Bank brought to 22 the number of Georgia lenders shut down this year. Old Harbor Bank was the 12th bank shuttered in Florida.

California and Illinois also have seen large numbers of bank failures.

In all of 2010, regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. Those failures cost around $23 billion. The FDIC has said 2010 likely was the high-water mark for bank failures from the Great Recession.

In 2009, there were 140 bank failures that cost the insurance fund about $36 billion, a higher price tag than in 2010 because the banks involved were bigger on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.

From 2008 through 2010, bank failures cost the fund $76.8 billion. The FDIC expects failures from 2011 through 2015 to cost $19 billion.

The deposit insurance fund fell into the red in 2009. With failures slowing, the FDIC's fund balance turned positive in the second quarter of this year; it stood at $3.9 billion as of June 30.