Fifth bank fails in Georgia this year
A Marietta bank was seized and sold by regulators Friday, the fifth bank in the state to fail this year and the 79th bank in Georgia to fail since mid-2008.
Security Exchange Bank's two branches will reopen Monday as branches of Atlanta's Fidelity Bank, according to the Federal Deposit Insurance Corp. Fidelity agreed to purchase essentially all of the $151 million in assets Security Exchange Bank had at the end of March, in addition to taking on $147.9 million in deposits.
Fidelity and the FDIC entered into a loss-share agreement on $102.8 million of Security Exchange Bank's assets.
Security Exchange Bank was founded in 2000. By the end of the first quarter of 2012, its foreclosed real estate and loans that were no longer earning interest made up nearly 60 percent of its total loans.
Its failure will cost the FDIC an estimated $34.3 million.
The last Georgia bank to fail was Covenant Bank and Trust of Rock Spring in North Georgia, which failed March 23. That nearly three-month span is the longest period without a failure in the state since Georgia's banking crisis began in 2008.
Georgia has more failed banks than any other state.
Still, the state's banks are showing signs of improvement. Collectively, Georgia banks have shown a profit for four consecutive quarters, and the state's banks saw a 26 percent increase in noninterest income, due in large part to trading gains and fees.
But Georgia banks are expected to remain troubled for some time, with more failures anticipated into 2013.
About the Author
Arielle Kass covers Gwinnett County for The Atlanta Journal-Constitution. She started at the paper in 2010, and has covered business and local government beats around metro Atlanta. Arielle is a graduate of Emory University.
