Two financial institutions have recently been shuttered — including one that had more than a quarter-billion dollars in assets.
The Official Code of Georgia, Section 7-1-150(a), authorizes the Georgia Department of Banking and Finance to take possession of financial institutions.
This authorization takes effect when a bank is insolvent or operating unsafely; violating a
court order, statute, rule or regulation; or requests that the state take possession.
Such was the case for
Capitol City Bank & Trust Co., which was seized and closed on Friday.
The bank was founded in October 1994. There were 78 employees impacted by its demise.
Capitol City was hit with a Federal Deposit Insurance Corp. cease-and-desist order in January 2010. Parent Capitol City Bancshares Inc. entered a written agreement with the state and the Federal Reserve Bank of Atlanta in January 2012.
In addition,
it lost its Federal Housing Administration approval in 2010 because it failed to meet annual recertification requirements.
As of Sept. 30, 2014, the bank had
$263 million in total deposits and $272 million in total assets — including $19 million in residential loans, $162 million in commercial mortgages and $5 million in construction-and-land-development holdings.
The state regulator handed over the failed Atlanta-based bank to the FDIC as receiver.
In turn, the FDIC reached a deal for First-Citizens Bank & Trust Co. to assume all of Capitol City’s deposits and acquire all its assets.
After all is said and done, the FDIC projects that its Deposit Insurance Fund will
be depleted by $89 million as a result of Capitol City’s failure — the third this year.
American Bakery Workers Federal Credit Union was closed by the National Credit Union Administration on Jan. 30.
“NCUA made the decision to liquidate American Bakery Workers and discontinue operations after determining the credit union was insolvent with no prospect for restoring viable operations,” the regulator said.
The Philadelphia-based credit union was chartered in 1940. It had nearly 1,500 members and more than $4 million in assets.
All of American Bakery Worker’s deposits were assumed by
TruMark Financial Credit Union, while TruMark also acquired a majority of the credit union’s loans.
It was the first credit union to go down this year.
In all, Mortgage Daily has tracked the demise of four mortgage-related entities so far during 2015.
