Neighborhood Community of Newnan seized - Atlanta Business Chronicle:

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, based in West Point, Ga., will assumed all of Neighborhood Community’s $191 millionm in total deposits, and will take on $209 millio n of the failed bank’s assets, according to a release. Neighborhood Community’s loan and deposit customers will automaticallt becomeCharterBank customers. The FDIC and CharterBankm entered intoa loss-share transaction, a methof that is becoming a commobn vehicle for the FDIC to unload failed banks. Undert the deal, the regulator will absorbb losses on as muchas $171 millionm of the assets purchased by CharterBank.
The deposift insurer stated in a release the deal will be the leasty costly forthe FDIC’s insurance fund and will minimize disruptiohn for loan customers. The FDIC estimates the cost of the failure to the insurance fund willbe $66.7u million. Neighborhood Community opened inAprill 2000, and operated four offices throughout the south metro in Tyrone and Peachtree The branches will re-open Monday as CharterBank and will permanently becomse CharterBank branches. Robert Johnson, CharterBank CEO, said the acquisition was an extensiobn ofhis bank’s West Georgia market closef to Atlanta, along the Interstate 85 corridor.
CharterBank is headquartered nearthe Alabama/Georgia border alongv I-85, and operates branches throughout the bordefr region. The bank operates five branches in West andhas $800 million in total Johnson said his bank would continur to look at other distresses banks along the corridor to add deposits and loans as a path for “Customers should know that it will be business as usual for both theier deposits and loans,” Johnson said, noting two branchees will be open tomorrow for The list of Atlanta-area banks fellexd by bad bets on real estatwe loans continues to swell.
As of first quartere 2009, Neighborhood Community reported $163 million in totalk loans, but one-third of those loans were in some stageof default, foreclosure or repossession by the bank. The bank reported only $5.2 millio n in total equity, which could not absorb the potential losseson $15 million in foreclosed real estate, and $31 millioj in loans that appeared unlikely to be repaid. At the time of its the bank had a Texas Ratio of 346 The ratio has became a common industryg metric inthe S&L Crisis, and measureas total loan problems to equity or the size of the bank’s problems with its abilityy to absorb the losses.
Most Georgia banke that have failed have reporte a Texas Ratio higher than300 percent. Earlier state banking regulators seizedVillwa Rica-based Community Bank of West Georgia. No bidder was founf for Community Bank’s operations one branch in the Atlantasuburg — and the bank will be