FDIC Seizes First Georgia Community Bank
From the Atlanta Business Chronicle, the Federal Deposit Insurance Corp. (FDIC) seized the assets of First Georgia Community Bank late today. See the FDIC Release by clicking here.
Zebulon, Ga.-based United Bank will assume all of the deposits of Jackson, Ga.-based First Georgia Community, according to announcements by the Federal Deposit Insurance Corp. and Georgia Department of Banking & Finance.
As of Nov. 7, First Georgia Community had $197.4 million in total deposits in four branches, while United Bank posted $553 million in deposits in third quarter 2008, according to FDIC data.
United Bank is acquiring the deposits for a 0.811 percent premium, and the FDIC expects the failure will cost its insurance fund $72 million.
United Bank also purchased $60.6 million in assets as part of the deal. The FDIC will hold the remainder of First Georgia Community’s assets, totaling $237.5 million, for later disposition.
Are federal and state banks subject to the same requirements as other corporate entities in the event of insolvency? Also, what happens to letters of credit when a bank itself goes bankrupt? If there is collateral, is it a secured loan, and if so to whom, the beneficiary of the LOC?
Thanks!
when a bank fails ie first georgia community bank, jackson ga what happens to the common stock.