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24th Bank Failure of 2008: Haven Trust Bank in Duluth, Georgia


Haven Trust Bank in Georgia was closed today by Georgia regulators, and the FDIC was named receiver. Here's the FDIC's press release link, and here's a summary of the closure:
  • Closed Bank: Haven Trust Bank
  • Location: Duluth, GA
  • Size: 4 branches, $572 million assets, $515 million deposits
  • Possible Uninsured Deposits: ALL deposits transferred to acquiring bank
  • Acquiring Bank: Branch Banking & Trust (BB&T)
  • Cost to Deposit Insurance Fund: $200 million (estimated)
  • 2008 closures: 24th bank to be closed this year
  • Financial Ratings: 0 star at BauerFinancial on 9/30 data (1 star on 6/30/08 data), 1 star at Bankrate.com on 6/30/08 and 9/30/08 data
This is yet another bank failure that is an All-Deposit Transfer in which all deposits including those over the FDIC limits were covered.

It appears BB&T hasn't agreed to continue Haven Trust Bank's CDs at the existing rates. According to Q&A #13, "BB&T will be reviewing rates and will provide further information soon." As always, all interest accrued through today will be paid at the existing rate. Also, customers have a choice to close their CDs without penalty (Q&A #11).

So even though the CD customer won't lose any principal or interest, he may lose out on future returns from a high yield. My last report on this bank was in October when it was offering a 4.75% 13-month CD. I'm sure most Haven Trust customers who opened these CDs will be hoping that BB&T allows these to continue with this rate until maturity. If you have a Haven Trust CD, please keep us up-to-date on what BB&T decides.

This is another example of the ratings from BauerFinancial and Bankrate being a good prediction of the potential for a closure. Both had given Haven Trust Bank their lowest ratings for soundness.

Another interesting thing to note about the closure is that it's the 5th bank failure in the Atlanta area this year.

Here's the FDIC list of all the recent bank failures. I just posted on the new documentation from the FDIC and NCUA that covers all the recent deposit insurance changes (see post).

Thanks to the readers who sent me news of this closure.

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Anonymous   |     |   Comment #1
Duluth is about 9 miles from Alpharetta (as the crow drives).

Is the Alpharetta curse spreading outward? Have they already shut down all the banks in Alpharetta?
Bill M
Bill M   |     |   Comment #2
It seems there could be fraud around that area, it seems that all these banks had extremely similar problems.
gaelicwench   |     |   Comment #3
You're not kidding about a curse in Alphretta. The first bank to go was NetBank. I had just closed my account with them when a couple of weeks later.....buh-bye!