Three more US banks fail; year's tally reaches 40

22 June 2009

The Federal Deposit Insurance Corporation (FDIC) has closed three more US banks, taking the number of failures so far this year to 40.

The latest failures are Southern Community Bank, Fayetteville, Georgia; Cooperative Bank, Wilmington, North Carolina; and First National Bank of Anthony, Anthony, Kansas.

United Community Bank, Blairsville, Georgia, will assume all of the deposits of Southern Community Bank. The offices of Southern Community Bank will reopen for normal business hours as branches of United Community Bank, and their deposits will continue to be insured by the FDIC.

Southern Community Bank is the seventh FDIC-insured institution to fail in Georgia, the sixth being Silverton Bank, National Association, Atlanta, on May 1, 2009.

As on May 29, 2009, Southern Community Bank had total assets of $377 million and total deposits of approximately $307 million. United Community Bank paid a premium of 1 per cent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, United Community Bank agreed to purchase approximately $364 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and United Community Bank entered into a loss-share transaction on approximately $253 million of Southern Community Bank's assets. United Community Bank will share in the losses on the asset pools covered under the loss-share agreement.