The failure of three East Coast financial institutions brought the number of mortgage-related businesses to close or fail this year to 70.
Officials with the Georgia Department of Banking and Finance joined forces with agents working for the Federal Deposit Insurance Corp. and stormed McIntosh State Bank on Friday.
The state said it was authorized to take the action under the Official Code of Georgia, Section 7-1-150(a), “whenever such financial institution is either insolvent or operating in an unsafe or unsound condition to transact its business.” An order for the action was issued by the Superior Court of Butts County.
The Jackson, Ga., bank was founded in 1964. As of the end of March, the staff size was 83 employees. Home-loan assets were $69 million, while commercial real estate holdings were $86 million and construction-and-land-development loans were $47 million. In 2007, it was hit with a $4,400 penalty over flood insurance compliance issues.
The FDIC was named receiver of McIntosh. A secret bidding process completed prior to the bank’s seizure landed its $340 million in total assets and $324 million in total deposits at Hamilton State Bank. An 0.50 percent premium was paid for the deposits.
The FDIC agreed to share in losses on $242 million of McIntosh’s assets, putting the estimated cost to the nation’s Deposit Insurance Fund at $80 million.
A little further south, in Tampa, Fla., First Commercial Bank of Tampa Bay was shuttered by the Florida Office of Financial Regulation.
First Commercial was established in 1989. One- to four-unit residential assets were $14 million, CRE loans on the balance sheet were $44 million and C&D loans stood at $8 million. The 29-employee firm was hit with an FDIC cease-and-desist order in May 2009.
Again, the FDIC was named receiver. The winning bidder was Stonegate Bank, which paid an 0.50 percent premium for the deposits. No loss-sharing agreement was disclosed by the FDIC, and losses from the bank’s failure were pegged at $29 million.
First Commercial was the 47th FDIC-insured failure during 2011.
Control of BCT Federal Credit Union was seized on June 10 by the National Credit Union Administration. The Binghamton, N.Y., institution’s 3,911 members were employed by the Southern Tier’s Educational Community. BCT was 67 years old at the time of its demise.
The NCUA will operate BCT in conservatorship as it appoints new management and fixes previous service and operational weaknesses.
Including BCT, Mortgage Daily has tracked 13 credit unions that have failed this year.
In all, 70 mortgage-related operations or companies have been closed or failed this year.
