Community Bank of Loganville, Georgia, Is Shuttered (20th failure of the year)

[Pale Blue Dot]

Source: Bloomberg

Nov. 21 (Bloomberg) -- Community Bank of Loganville, Georgia, was closed by a state regulator today, the 20th U.S. bank seized this year as foreclosures rise and home prices extend declines in the worst housing slump since the Great Depression.

Bank of Essex in Tappahannock, Virginia, will take over all of the $611.4 million of deposits from Community Bank, the Federal Deposit Insurance Corp. said today in an e-mailed statement. Community Bank’s four offices will open Nov. 24 as Bank of Essex branches.

“Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage,” the FDIC said.

Regulators this year have closed the most banks since 1993, including 15 since July, and the collapses of Washington Mutual Inc. and IndyMac Bancorp Inc. were among the biggest in history. The U.S. is seeking to boost bank capital and avert failures using $250 billion from a bank-rescue fund enacted after the housing slump and tightening credit froze markets.

Bank of Essex will buy about $84.4 million of the failed bank’s $681 million in assets, with the FDIC retaining the rest for later disposition. It paid a premium of $3.2 million to assume the deposits, the FDIC said. The transaction will cost the deposit insurance fund, supported by fees on insured banks, $200 million to $240 million, the agency said. Community Bank opened in 1946.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aF0ypKlGplsw&refer=home

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Bold is mine.

[BR_Parkway]

1. How do you buy 681 million in assets for 3.2 million?

[deadmessengers]

2. When they're attached to about 678 million in liabilities. n/t

[BR_Parkway]

3. No, they're only taking on 84.4 million of the failed assets, FDIC is

keeping the rest. Maybe now is a time to buy banking stocks

"Bank of Essex will buy about $84.4 million of the failed bank’s $681 million in assets, with the FDIC retaining the rest for later disposition."