After a brief holiday respite, bankfailure Friday came back with a vengeance. The FDIC and itsfellow regulators closed six institutions, bringing the total to 130for the year. (See our complete list of failed banks this year.)
By far, the largest institution to go down was Cleveland-based savings and loan AmTrust.It's the fourth-largest bank or thrift to fail this year. As of lateOctober, AmTrust had total deposits of approximately $8 billion. Itsdemise is expected to cost the FDIC's deposit fund about $2 billion.
Ina geographic departure, New York Community Bank of Westbury, New Yorkentered into an agreement with the FDIC to assume all of AmTrust'sdeposits and its 66 branches. Until now, New York Community only hadbranches in New York and New Jersey.
The Wall Street Journal has a detailed account of AmTrust's slow demise,including how politicians in Cleveland and Washington interceded withregulators to give the thrift more time, thereby likely increasing theultimate cost to the FDIC.
Also failing on Friday were threebanks in Georgia. The Peach State now leads the country in bankfailures, with 24 this year. Among the failures was Buckhead Community Bank, located in a tony suburb of Atlanta. The Atlanta Journal-Constitution describes the bankas "founded by Atlanta business royalty to cater to a wealthyclientele." It had total deposits of approximately $838 million. Thefailure will cost the FDIC's deposit fund an estimated $241 million.
Thebig winner in Georgia Friday was Macon-based State Bank & Trust,which gobbled up the remains of Buckhead Community Bank. As the Journal-Constitution reports:
Untilrecently State Bank was one of the state's smallest lenders. But lastsummer, the bank was acquired by an investment team led by veteranGeorgia banker Joe Evans, who raised nearly $300 million to take overSecurity Bank of Macon, which failed in July.
Whilegaining the deposits of Buckhead Community Bank, State Bank also agreedto take on Buckhead's failed assets, which includes failing loans.
State Bank & Trust also picked up First Security National Bankof Norcross, Georgia, which the Office of the Comptroller of theCurrency closed Friday. As of late September, First Security hadapproximately $123 million in deposits. State Bank bought the depositsand will also cover approximately $118 million of the failed assets.The last bank to fail in Georgia Friday was Tattnall Bankof Reidsville. HeritageBank of the South assumed its deposits. The dayscarnage in Georgia alone cost the FDIC's deposit fund about $285million.
The Greater Atlantic Bank of Reston, Virginia and Benchmark Bankof Aurora, Illinois rounded off the day's failures. This is the firstbank failure in Virginia since 1993. Greater Atlantic's deposits weretaken by Sonabank of McLean Virginia. Benchmark Bank is the 20th bankto fail in Illinois this year. Only Georgia has had morefailures. Benchmark Bank's deposits were assumed by MB Financial Bankof Chicago. The two failures are expected to cost the FDIC's depositfund $99 million.
Add it all up, and Friday's bloodbath will cost the FDIC's deposit fund an estimated $2.38 billion.
