Crescent Bank of Jasper closed by regulators

Crescent, with 11 branches in Bartow, Cherokee, Cobb, Forsyth, Fulton and Pickens counties, was the largest troubled bank in the metro area when it failed. It had $1 billion in assets and $965 million in deposits.

Renasant agreed to assume $617.4 million of the failed bank’s assets and deposits, the FDIC said. In connection with the deal, Renasant paid a 1 percent premium to assume Crescent’s deposits.

The cost to the FDIC’s fund is estimated at $242.4 million.

Crescent was seen as a prize among potential failed bank bidders, experts in the industry said.

The publicly traded bank was founded in 1989 and pursued a slow growth strategy in its first decade. Crescent relied heavily on a wholesale mortgage origination business until 2003.

In 2004,  Crescent sold Crescent Mortgage Services  at the peak of the market and acquired Futurus Bank in April 2005. The deal brought Crescent into Fulton County, and over the next few years, the bank built branches and went gung-ho on real estate development loans.

Crescent was a heavy lender to subdivision developers, strip retail centers and builders of vacation homes. From 2004 to 2008, Crescent doubled in size from $500 million in assets to $1 billion, fueled by a diet of real estate development loans.

Problems started in 2007 with the collapse of the housing market.

Problem loans, those late, in default or foreclosed, grew from $14.8 million in June 2007 to $82.5 million a year later. Meanwhile, Crescent's reserves plunged.

The bank lost $13.7 million in the first quarter this year, after losses of more than $30 million in each of the past two years.

“Unfortunately, timing is everything,” said Chip MacDonald, a banking attorney at Jones Day.