Regulators shut down two more small Georgia banks Friday, ending a nearly two-month period without any seizures here.
Bartow County Bank of Cartersville and New Horizons Bank of East Ellijay became the seventh and eighth Georgia banks to be shut down by regulators this year. The state leads the nation with 59 failures since mid-2008.
Bartow County Bank was acquired by Hamilton State Bank of Hoschton and its four branches will reopen Saturday as Hamilton State under normal business hours, according to the Federal Deposit Insurance Corp.
New Horizons was acquired by Citizens South Bank of Gastonia, N.C., and its one former branch will reopen Monday under its new flag.
The banks are the first to fail in Georgia since Feb. 18. The eight-week period was the longest stretch in Georgia without a failure since a nearly two-month lull last summer.
Bartow County Bank reported $330.2 million in assets and $304.1 million in deposits as of December, the FDIC said. Hamilton State bought most of the bank’s assets and all its deposits in a loss-share deal with the regulator.
The FDIC said its failure will cost its Deposit Insurance Fund, the backstop that protects customer deposits, an estimated $69.5 million.
Citizens South acquired the bulk of New Horizons’ $110.7 million in assets and all its $106.1 million in deposits, also under a loss-share arrangement. The FDIC estimated its loss to be $30.9 million from New Horizons’ failure.
Like the rest of Georgia’s bank failures, Bartow County Bank and New Horizons focused much of their lending on real estate development or loans backed with property as collateral.
New Horizons, founded in 2004, was particularly dependent on construction and development, with more than half of its loan book in that category at its peak in 2007, said Chris Marinac, bank analyst with FIG Partners in Atlanta.
“This was a bank from the outset that was neither safe nor sound,” Marinac said, criticizing its dependence on real estate development.
Bartow County Bank, founded in 1974, had 20 percent of its loan book in construction at its peak, fairly low among Georgia’s failed banks, Marinac said. But by the end of 2010, 88 percent of construction loans were in distress, he said.
Citizens South bought the failed Bank of Hiawassee last year. Bartow County Bank is the first failed bank purchase for Hamilton State, which recently received a major injection of investor cash and earlier this week paid off its government aid from the financial crisis.
