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Huge Failure Friday

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Friday’s failure of Guaranty Bank in Texas is expected to deplete the nation’s deposit insurance fund by $3 billion. Three other banks — including two Georgia institutions — were also shut down Friday.

The first to fall was Atlanta-based ebank, which was closed by the Office of Thrift Supervision and handed over to the Federal Deposit Insurance Corporation as receiver.

Assets at 19-employee ebank, originally opened in 1998 as Commerce Bank, totaled $143 million as of July 10 and were all acquired by Stearns Bank, National Association with the FDIC sharing in losses on $111 million in assets. Assets included $61 million in residential mortgages, $10 million in commercial mortgages and $16 million in construction-and-land-development loans. Stearns also acquired all of ebank’s $130 million in deposits. The FDIC expects to lose $63 million as a result of ebank’s failure.

First Coweta, based in Newnan, Ga., was closed by the Georgia Department of Banking and Finance. As of July 31, the bank’s assets were $167 million — including $31 million in home loans, $30 million in commercial mortgages and $51 million in construction-and-land-development loans — of which United Bank agreed to purchase $155 million. United Bank also assumed all of the failed firm’s $155 million in Deposits at a 1.01 percent premium.

The FDIC agreed to share in losses on $124 million of the five-year-old bank’s assets, pushing the estimated cost to the Deposit Insurance Fund to $48 million. First Coweta employed 44 people as of March 31.

CapitalSouth Bank, which was seized by the Alabama State Banking Department pursuant to Section 5-8A-20 of the Code of Alabama, was Friday’s third failure. CapitalSouth was established in 1975 and reported 119 employees as of March 31.

It faced a Federal Reserve cease-and-desist-order and unsuccessfully attempted to find a buyer late last year.

IBERIABANK agreed to acquire $589 million of CapitalSouth’s $617 million in assets as of June 30 — which included $124 million in residential loans, $182 million in commercial real estate loans and $107 million in construction-and-land-development loans. The FDIC agreed to a $499 million loss-sharing agreement, bringing its estimated losses to $151 million. IBERIABANK also agreed to acquire all of CapitalSouth’s $546 million in deposits.

Friday’s fourth failure, Austin, Texas-based Guaranty Bank, was closed by the OTS. The 21-year-old bank had 1,761 employees as of March 31 and 162 California and Texas branches.

Guaranty, which had recently warned of its impending collapse, was operating under an OTS cease-and-desist order.

BBVA Compass agreed to assume nearly $12 billion in non-brokered deposits from Guaranty. It also agreed to acquired $12 billion of Guaranty’s $13 billion in assets, with the FDIC sharing in losses on $11 billion in assets. FDIC losses were estimated at $3 billion. Guaranty held $2.065 billion in home loans, $2.120 billion in commercial mortgages and $3.001 in construction-and-land development loans as of March 31.

Guaranty was the 81st FDIC-insured bank failure this year. In all, MortgageDaily.com has reported the closing of 135 mortgage-related operations so far in 2009.

Franklin American Mortgage Co. has ceased offering wholesale jumbo programs, according to published reports.

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