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Two More Georgia Banks Fail

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Two small Georgia banks were closed by regulators this Friday. There have now been a total of 19 bank failures in Georgia this year. That puts Georgia well out in front as the state with the most bank failures in 2011. The second place state is Florida with 10 bank failures, and the third place state is Illinois with 7 bank failures.

The FDIC arranged for Georgia Commerce Bank to acquire the banking operations of both banks. Georgia Commerce Bank assumed all deposits including brokered deposits. So no depositor will lose any money even if they have over the FDIC insured limit.

Georgia Commerce Bank has not provided any information on its website about if they will honor existing CD rates from the two failed banks until maturity. The acquiring bank is free to lower rates of existing CDs as long as they allow the CD holders to make a penalty-free early withdrawal.

As you might expect in today's interest rate environment, many acquiring banks have decided to lower CD rates. However, occasionally an acquiring bank decides to keep CD rates the same until maturity. The latest example of such a bank is Sabadell United Bank which assumed the deposits of Lydian Private Bank last month. Lydian was the parent of Virtual Bank. I was told by a Virtual Bank customer service rep that they have decided to let Virtual Bank CD holders keep their existing CDs with the same rate until maturity.

Below is the summary of this week's bank failures.

69th Bank Failure of 2011 (18th in Georgia)

  • FDIC Press Release
  • Closed Bank: Patriot Bank of Georgia, Cumming, GA
  • Size: 1 branch, $150.8 million in assets, $111.2 million in deposits
  • Acquiring Bank: Georgia Commerce Bank, Atlanta, GA
  • Possible Uninsured Deposits: All deposit accounts, including brokered deposits, have been assumed by Georgia Commerce Bank
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $44.4 million
  • Enforcement Action: None
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 890.91% at DepositAccounts.com (see financial rating note)

70th Bank Failure of 2011 (19th in Georgia)

  • FDIC Press Release
  • Closed Bank: CreekSide Bank, Woodstock, GA
  • Size: 2 branches, $102.3 million in assets, $96.6 million in deposits
  • Acquiring Bank: Georgia Commerce Bank, Atlanta, GA
  • Possible Uninsured Deposits: All deposit accounts, including brokered deposits, have been assumed by Georgia Commerce Bank
  • Rate Changes: Current rates will be reviewed by the new bank and may be lowered (FDIC Q&A)
  • Estimated Cost to Deposit Insurance Fund: $27.3 million
  • Enforcement Action: FDIC 1/8/10 Consent Order
  • Financial Ratings: 1 star at Bankrate.com, 0 star at BauerFinancial, 1 star & Texas Ratio of 757.34% at DepositAccounts.com (see financial rating note)

Financial Ratings Notes: 0 star is lowest at BauerFinancial, 1 star is lowest at Bankrate.com & DepositAccounts.com, Texas Ratios over 100% is considered at risk. Ratings are based on March 2011 data.

References:



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Comments
15 comments.


Comment #2 by 27.14 peercent (anonymous) posted on
27.14 peercent
keep up the good work georgia

3
Comment #3 by Anonymous posted on
Anonymous
After bailing the banks with $600 Billion in 2009, the US Government is suing the largest banks for $197 Billions to recover some of the losses.

The following 17 institutions (banks) are at risk for downgrades:

Ally Financial Inc., formerly known GMAC LLC, Bank of America Corp., Barclays Bank PLC, Citigroup Inc., Countrywide Financial Corp., Credit Suisse Holdings Inc., Deutsche Bank AG, First Horizon National Corp., General Electric Co., Goldman Sachs & Co., HSBC North America Holdings Inc., JPMorgan Chase & Co., Merrill Lynch & Co. and its unit First Franklin Financial Corp., Morgan Stanley, Nomura Holding America Inc., The Royal Bank of Scotland Group PLC, and Societe Generale.

5
Comment #4 by What's in a name? (anonymous) posted on
What's in a name?
 "We are J.P. Morgan Chase. Existence, as you know it, is over. We will add your assets and property to our own. Resistance is futile."

1
Comment #5 by Anonymous posted on
Anonymous
Response to #3,

Thanks for the info, I like to add to it that Bernanke holds additional $1.2 Trillions more in worthless mortgage papers, is going to sue the same banks?

3
Comment #8 by Pablo Savin (anonymous) posted on
Pablo Savin
There are so many bank failures in Georgia because most people in Metro Atlanta like the bling, see what I have, with no cash to back up anything. These banks sprang up when any fool could get a loan, let it be commercial or residential. Many of my neighbors moved out of our starter home neighborhood and now work for me on the weekends . Bunch a wanna be's . Now those of us who are conservative and pay our bills are paying for it.

1
Comment #9 by Anonymous posted on
Anonymous
Bernanke is ruining the US economy by printing worthless money sold as bonds.
If QE1,2 did not solve the problem, why try and try the same old policy.
QE3 will totally deflate the economic outlook and will trash the Dollar.
If that is the objective of the FEDs, then they are succeeding to make us all poor.

Al those meetings are pointless, pretending to be important and pretending that they are the solution and not the problem, then we got big problem in the FEDs.

 

2
Comment #14 by bling it on pablo (anonymous) posted on
bling it on pablo
i agree

1