Regulators Shut Failed Bank in Georgia

Georgia regulators on Friday shut down The Community Bank, the 20th failure this year of a federally insured institution.

Georgia regulators have shut down The Community Bank, the 20th failure this year of a federally insured institution.

(ABC/AP)

The Federal Deposit Insurance Corp. was appointed receiver of the bank, located in Loganville, Ga. It had $681 million in assets and $611.4 million in deposits as of Oct. 17.

The FDIC said all the bank's deposits and about $84.4 million of its assets will be acquired by Bank of Essex, of Tappahannock, Va. Its four branches will reopen Monday as offices of Bank of Essex.

The agency said depositors of The Community Bank will continue to have full access to their deposits.

The FDIC estimated that the resolution of The Community Bank will cost the federal deposit insurance fund between $200 million and $240 million.

Regular deposit accounts are now insured up to $250,000 as part of the financial rescue law enacted in early October. The limit on individual retirement accounts held in banks remains at $250,000.

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The 20 bank failures so far this year compare with three for all of 2007 and are far more than in the previous five years combined. It's expected that many more banks won't survive the next year of economic tumult. The pressures of tumbling home prices, rising mortgage foreclosures and tighter credit have been battering many banks, large and small, nationwide.

This year's failures include Seattle-based thrift Washington Mutual Inc. in late September, the biggest bank collapse in U.S. history. It had $307 billion in assets. In July, another big savings and loan, IndyMac Bank based in Pasadena, Calif., failed and was seized by regulators with about $32 billion in assets.

The FDIC estimates that through 2013 there will be about $40 billion in losses to the deposit insurance fund, including an $8.9 billion loss from the failure of IndyMac Bank. The FDIC is raising insurance premiums paid by banks and thrifts to replenish its fund, which now stands at around $45.2 billion, below the minimum target level set by Congress and the lowest level since 2003.