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The Mortgage Graveyard
Failed, closed and a c q u i r e d mortgage-related entities.
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| 4 Failed Financial Institutions
Regulators in CA, GA and MN close banks
June 26, 2009
By MortgageDaily.com staff
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After several weeks of relatively few bank failures, four banks in three states were seized today by state regulators. MortgageDaily.com tracked regulatory orders against all four of the institutions prior to their failures.
First to go was Community Bank of West Georgia, which was closed by the Georgia Department of Banking and Finance and placed under the receivership of the Federal Deposit Insurance Corporation, a news release said.
In a rare move by the FDIC, the Villa Rica, Ga., bank was liquidated instead of being sold. Direct deposits from the federal government will be redirected to United Community Bank.
Community Bank was founded in March 2003 and employed 31 people as of the end of March. The Federal Reserve Board recently issued a prompt corrective action directive against Community Bank. In September 2008, the fed entered a formal agreement with the failed institution.
Community Bank had $199 million in assets as of May 15, including $15 million in residential loans, $61 million in commercial mortgages and $41 million in construction-and-land-development loans as of March 31. Deposits as of May 15 were $183 million.
The FDIC expects to lose $85 million from Community Bank's failure -- the 41st FDIC-insured failure this year.
Just a little southeast of Community Bank, in Newnan, Neighborhood Community Bank was also seized by the Georgia regulator, another announcement said.
The FDIC, which was appointed receiver, sold all of Neighborhood's $191 million in deposits as of March 31 to CharterBank.
Total assets as of March 31 at Neighborhood were $222 million -- including $23 million in one- to four-unit loans, $38 million in commercial mortgages and $66 million in construction-and-land-development loans. CharterBank acquired $210 million of the failed bank's assets -- with the FDIC sharing in losses on $179 million of the assets. In all, the FDIC expects its Deposit Insurance Fund to be depleted by $68 million because of Neighborhood's failure.
The fed took a prompt corrective action directive in May against Neighborhood and entered a formal agreement with the 40-employee company last year.
Neighborhood, originally founded in April 2000, was the 42nd FDIC-insured bank to fail this year.
No. 43 was Horizon Bank, which was closed by the Minnesota Department of Commerce and placed under the receivership of the FDIC.
Horizon was founded in 1915 and had just 20 employees at the end of March. The FDIC issued a cease-and-desist order against the institution in January.
Stearns Bank, National Association, acquired all of the Pine City, Minn.'s, $69 million in deposits as of March 31 for an 0.75 percent premium. Stearns also acquired $84 million of Horizon's $88 million in assets, of which the FDIC agreed to share in losses on $65 million. Residential holdings ended March at $24 million, while commercial mortgage assets were $15 million and construction-and-land-development loans were $5 million.
FDIC losses on Horizon are projected at $34 million.
Over in California, the Department of Financial Institutions announced the closing of MetroPacific Bank because of inadequate capital. The state previously ordered the bank to increase its capital reserves to no avail.
MetroPacific, based in Irvine, Calif., was founded in 2005. Just 20 employees worked at the company as of March 31.
The FDIC, which was appointed receiver, sold all but $6 million of MetroPacific's $73 million in deposits as of June 8 to Sunwest Bank. In addition, Sunwest purchased all of the failed bank's $80 million in assets -- which included $3 million in home loans, $18 million in commercial mortgages and $10 million in construction-and-land-development loans as of March 31.
Last year, the FDIC issued a cease-and-desist order against MetroPacific. FDIC losses pegged to MetroPacific's failure are estimated at $29 million.
MetroPacific was the 44th federally insured institution to fail this year and the 85th mortgage-related closing tracked by MortgageDaily.com. |
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Corporate Mortgage News
M e r g e r s, a c q u i s i t i o n s and private and public offerings. Other corporate activity including executive appointments, bankruptcies name changes.
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Mortgage Compliance News | Mortgage Compliance Newsletter | Mortgage Regulations
News about complying with mortgage laws, rules and regulations.
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