Regulators shutter banks in North Carolina, Georgia; brings this year's US bank failures to 10

WASHINGTON – Regulators have closed banks in Georgia and North Carolina, bringing the number of U.S. bank failures to 10 this year.

The Federal Deposit Insurance Corp. said on Friday it seized Douglas County Bank, based in Douglasville, Ga.

The lender, which had four branches, had about $316.5 million in assets and $314.4 million in deposits.

Regulators also closed Parkway Bank, based in Lenoir, N.C., which had about $108.6 million in assets and $103.7 million in deposits.

The FDIC arranged for other banks to take over the failed banks’ deposits and purchase their assets.

Hamilton State Bank, based in Hoschton, Ga., will pay the FDIC a 0.5 per cent premium to assume the deposits of Douglas County Bank.

Hamilton also agreed to buy $260.9 million in the failed lender’s assets, and entered into a loss-share transaction on $159.2 million of the assets.

Meanwhile, CertusBank NA, based in Easley, S.C., agreed to assume all of the deposits of Parkway Bank, which had three branches.

CertusBank also agreed to buy $99.2 million of the Parkway’s assets.

The FDIC said it would retain the remaining assets for later disposition.

All told, the failures of Douglas County Bank and Parkway Bank are expected to cost the deposit insurance fund $104.5 million combined.

U.S. bank closures have been declining since they peaked in 2010 in the wake of the financial crisis and the Great Recession.

In 2007 just three banks went under. That number jumped to 25 in 2008, after the financial meltdown, and ballooned to 140 in 2009.

In 2010 regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. The FDIC has said 2010 likely was the high-water mark for bank failures from the recession. They declined to a total of 92 in 2011.

Last year bank failures slowed to 51, but that’s still more than normal.

In a strong economy an average of only four or five banks close annually. The sharply reduced pace of closings shows sustained improvement.

From 2008 through 2011, bank failures cost the deposit insurance fund an estimated $88 billion, and the fund fell into the red in 2009. But with failures slowing, the fund’s balance turned positive in the second quarter of 2011.

By Dec. 31, it stood at $32.9 billion, up from $25.2 billion at the end of September.

The FDIC expects bank failures from 2012 through 2016 to cost $10 billion.