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South Sees Two Financial Institution Failures

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Two financial institutions, one in Georgia and another in Kentucky, were recently seized and closed down by regulators.

Eastside Commercial Bank was closed Friday by the Georgia Department of Banking & Finance, a statement from the bank regulator said.

The state said it is authorized to take possession of state-chartered financial institutions when they are either insolvent or operating in an unsafe or unsound condition; operating in violation of any court order, statute, rule or regulation; or request the department to take possession.

The Conyers, Ga.-based bank had two branches. It was founded in 2005 and employed 17 people as of March 31.

Total deposits were $162 million and total assets were $169 million — including $9 million in residential loans, $34 million in commercial real estate loans and $14 million in construction-and-land development loans.

It was hit with a Federal Deposit Insurance Corp. cease-and-desist order in October 2009.

An order issued by the Superior Court of Rockdale County, Ga., appointed the FDIC as receiver

The FDIC held a secret auction and awarded the winning bid to Community & Southern Bank, which assumed all of Eastside’s deposits and acquired $105 million of its assets.

In addition, State Bank and Trust Co. purchased $43 million of Eastside’s loans.

After all is said and done, the FDIC expects its Deposit Insurance Fund to be depleted by $34 million as a result of the bank failure.

Eastside was the 13th FDIC-insured bank failure so far in 2014.

IBEW Local 816 Federal Credit Union was liquidated on July 10 by the National Credit Union Administration.

The financial institution, located in Paducah, Ky., had just $6 million in assets and 929 members.

It was chartered in 1954 to serve employees of the International Brotherhood of Electrical Workers, AFL-CIO and their family members.

“NCUA made the decision to liquidate IBEW Local 816 Federal Credit Union and discontinue its operations after determining the credit union was insolvent and had no prospect for restoring viable operations,” the NCUA stated.

Mortgage Daily has tracked the demise of six credit union so far this year.

In all, Mortgage Daily has reported on 30 mortgage-related entities that have either closed down or failed in 2014.

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