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2 More Banks Fail

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Mortgage Daily

                                                 December 15, 2008

On Friday, bank regulators seized two more banks, bringing to 25 the number of federally insured institutions that have failed this year. One of the firms was 101 years old, while the other is expected to cost the insurance fund $0.2 billion.

The Texas Department of Banking shut down Sanderson State Bank on Friday, a news release late Friday said. The institution — established in 1907 — was located in Sanderson, Texas, a town with a population of just 800.

The Federal Deposit Insurance Corporation has been named receiver.

“The bank was experiencing significant liquidity problems caused by an over-reliance on brokered deposits and inability to meet these liability obligations,” an announcement from the state regulator said. “The institution also encountered severe asset quality problems and recorded losses in 2007 and year-to-date 2008.”

The failed bank’s $28 million in deposits were assumed by The Pecos County State Bank for an 0.55 percent premium, the FDIC said. Pecos will acquire around $4 million of Sanderson’s $37 million in assets. Included among Sanderson’s holdings were $$16 million in residential loans and $3 million in commercial mortgages.

The single Sanderson location reopens today as a branch of Pecos, which itself is based in Fort Stockton, Texas. Just 12 people were employed at Sanderson as of Sept. 30, according to FDIC data. A Houston loan production office was also closed down.

The failure of Sanderson, the 25th bank to be placed in receivership during 2008, is expected to cost the Deposit Insurance Fund $13 million.

No. 24, Haven Trust Bank, was closed by the Georgia Department of Banking and Finance also on Friday, another FDIC announcement said. The Superior Court of Gwinnett County issued an order appointing FDIC as receiver of the Duluth-based bank, which was established in 2000.

Branch Banking & Trust agreed to pay $112,000 to assume Haven’s $515 million in deposits. Four Haven branches reopen today as branches of BB&T.

Haven had $572 million in assets, including $261 million in commercial mortgages, $133 million in construction and land development loans and $37 million in residential mortgages as of Sept. 30, FDIC data indicates. BB&T will purchase around $55 million of the assets, while the FDIC expects to eat $200 million.

Haven reported 65 employees at the end of September.

These latest two failures bring to 100 the number of mortgage-related firms or operations that have been shut down this year.

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