Weekend Economists Revelations and Reviews April 26-28, 2013

[Demeter]

1. 2 MORE BANKS BITE THE DUST

I really have to think the Sequester is behind this...


Parkway Bank, Lenoir, North Carolina, was closed today by the North Carolina Office of the Commissioner of Banks, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with CertusBank, N.A., Easley, South Carolina, to assume all of the deposits of Parkway Bank.

The three former branches of Parkway Bank will reopen as branches of CertusBank, N.A. during their normal business hours...As of December 31, 2012, Parkway Bank had approximately $108.6 million in total assets and $103.7 million in total deposits. In addition to assuming all of the deposits of the failed bank, CertusBank, N.A. agreed to purchase approximately $99.2 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $18.1 million. Compared to other alternatives, CertusBank, N.A.'s acquisition was the least costly resolution for the FDIC's DIF. Parkway Bank is the ninth FDIC-insured institution to fail in the nation this year, and the first in North Carolina. The last FDIC-insured institution closed in the state was Waccamaw Bank, Whiteville, on June 8, 2012.

Douglas County Bank, Douglasville, Georgia, was closed today by the Georgia Department of Banking & Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Hamilton State Bank, Hoschton, Georgia, to assume all of the deposits of Douglas County Bank. The four former branches of Douglas County Bank will reopen as branches of Hamilton State Bank during their normal business hours...As of December 31, 2012, Douglas County Bank had approximately $316.5 million in total assets and $314.3 million in total deposits. Hamilton State Bank will pay the FDIC a premium of 0.5 percent to assume all of the deposits of Douglas County Bank. In addition to assuming all of the deposits of the failed bank, Hamilton State Bank agreed to purchase approximately $260.9 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition.

The FDIC and Hamilton State Bank entered into a loss-share transaction on $159.2 million of Douglas County Bank's assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $86.4 million. Compared to other alternatives, Hamilton State Bank's acquisition was the least costly resolution for the FDIC's DIF. Douglas County Bank is the 10th FDIC-insured institution to fail in the nation this year, and the second in Georgia. The last FDIC-insured institution closed in the state was Frontier Bank, LaGrange, on March 8, 2013.