Regulators shut down two struggling metro Atlanta banks Friday, the 18th and 19th in Georgia to fail in 2011.
Cumming-based Patriot Bank of Georgia and Woodstock-based CreekSide Bank were seized and sold to Atlanta-based Georgia Commerce Bank. The banks will reopen under their new flag Tuesday because Labor Day is a bank holiday, the Federal Deposit Insurance Corp. said.
Seventy banks have failed in Georgia since mid-2008, more than any other state in that time.
Patriot Bank had one branch, $150.8 million in total assets and $111.2 million in total deposits, according to the latest FDIC data.
CreekSide operated two branches and reported total assets of $102.3 million and total deposits of $96.6 million at the end of second quarter, the FDIC said.
Georgia Commerce agreed to assume the bulk of the failed banks’ assets and all of their deposits in a loss-share agreement with the FDIC.
The FDIC estimates the failures will result in a combined $71.7 million loss to its insurance fund, which protects depositors.
Patriot Bank was founded in 2006 and quickly ramped up real estate lending in the northern metro Atlanta suburbs, particularly commercial real estate. The bank quadrupled in asset size to $176.5 million by the end of 2009.
Problem loans -- those delinquent, in default and foreclosed -- made up 44.1 percent of the bank’s holdings, according to a FIG Partners analysis of second quarter FDIC data.
The bank lost $14.6 million since the beginning of 2008, according to FDIC data.
CreekSide Bank also was founded in 2006, and lent heavily in commercial real estate and development loans. According the FIG analysis, 41.6 percent of CreekSide’s loans were in some form of trouble.
The bank lost $16.9 million since the beginning of 2008, according to FDIC data.
Friday’s acquisitions are the first failed banks assumed by Georgia Commerce.
In February, Georgia Commerce became the first bank in Georgia that had received federal aid under the Troubled Asset Relief Program to repay the government.
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