Another Friday afternoon massacre claims another failed U.S. bank. This time the bank was in Georgia. Integrity Bank of Alpharetta, GA had $1.1 billion in assets. As is FDIC custom, the announcement wasn’t made until after markets had closed on Friday.
Integrity is the tenth U.S. bank to be taken over by the FDIC this year and the twelfth since the credit crisis began over one year ago. Regions Bank has acquired all of the assets of the bank, so obviously this deal has been in the works for a bit.
Note: The first bank to fail in this crisis, Net Bank, was also headquartered in Alpharetta.
Integrity Bank, Alpharetta, Georgia, with $1.1 billion in total assets and $974.0 million in total deposits as of June 30, 2008, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation was named receiver.
The FDIC Board of Directors today approved the assumption of all the deposits of Integrity Bank by Regions Bank, Birmingham, Alabama. All depositors of Integrity Bank, including those with deposits in excess of the FDIC’s insurance limits, will automatically become depositors of Regions Bank for the full amount of their deposits, and they will continue to have uninterrupted access to their deposits. Depositors will continue to be insured with Regions Bank so there is no need for customers to change their banking relationship to retain their deposit insurance.
The failed bank’s five offices will reopen Tuesday, September 2nd, as branches of Regions Bank. However, for the time being, customers of both banks should use their existing branches until Regions Bank can fully integrate the deposit records of Integrity Bank.
Regions Bank has agreed to pay a total premium of 1.012 percent for the failed bank’s deposits. In addition, Regions Bank will purchase approximately $34.4 million of Integrity Bank’s assets, consisting of cash and cash equivalents. The FDIC will retain the remaining assets for later disposition.
Customers with questions about today’s transaction or who would like more information about the failure of Integrity Bank can visit the FDIC’s Web site at https://www.fdic.gov/bank/individual/failed/integrity.html, or call the FDIC toll-free at 1-800-523-0640, today from 5 p.m. until 9 p.m., Eastern Time, on Saturday from 9 a.m. to 6 p.m., on Sunday from 11 a.m. to 5 p.m., and thereafter from 8 a.m. to 8 p.m.
The FDIC estimates that the cost to its Deposit Insurance Fund will be between $250 million and $350 million. Regions Bank’s acquisition of all deposits was the “least costly” resolution for the FDIC’s Deposit Insurance Fund compared to all alternatives because the expected losses to uninsured depositors were fully covered by the premium paid for the failed bank’s franchise.
Integrity Bank is the tenth FDIC-insured bank to fail this year, and the first in Georgia since NetBank in Alpharetta on September 28, 2007.
Sources
FDIC Failed Bank List
Regions Bank Acquires All the Deposits of Integrity Bank, Alpharetta, Georgia – FDIC Press Release
See my list of Bankrupt global financial institutions for major bankruptcies (this is not one) and my Credit Crisis Timeline for writedown announcements.