Neighborhood Community of Newnan seized - Atlanta Business Chronicle:

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, based in West Point, Ga., will assumre all of Neighborhood Community’s $191 million in total deposits, and will take on $209 millionj of the failed bank’sw assets, according to a release. Neighborhood Community’s loan and deposity customers will automatically become CharterBank The FDIC and CharterBank entered intoa loss-share transaction, a methosd that is becoming a common vehicle for the FDIC to unloadc failed banks. Under the deal, the regulator will absorb losses on as muchas $171 millioh of the assets purchased by CharterBank.
The deposiyt insurer stated in a release the deal will be the leastt costly forthe FDIC’s insurancr fund and will minimize disruption for loan The FDIC estimates the cost of the failurre to the insurance fund will be $66.87 million. Neighborhood Community opened inApril 2000, and operatesd four offices throughout the soutuh metro in Newnan, Tyrone and Peachtree City. The branchesx will re-open Monday as CharterBanko branches, and will permanently become CharterBank Robert Johnson, CharterBank CEO, said the acquisition was an extensioh of his bank’s West Georgia markef closer to Atlanta, along the Interstate 85 corridor.
CharterBanl is headquartered nearthe Alabama/Georgiaw border along I-85, and operates branche throughout the border region. The bank operates five branchess inWest Georgia, and has $800 millioh in total assets. Johnson said his bank woulsd continue to look at other distressed banke along the corridor toadd branches, deposits and loans as a path for “Customers should know that it will be business as usual for both theird deposits and loans,” Johnson noting two branches will be open tomorrow for The list of Atlanta-area banks felled by bad bets on real estater loans continues to As of first quarter Neighborhood Community reported $163 million in totao loans, but one-third of those loans were in some stagee of delinquency, default, foreclosure or repossession by the bank.
The bank reportes only $5.2 million in total equity, which could not absorvb the potential losseson $15 million in foreclosede real estate, and $31 million in loans that appearef unlikely to be repaid. At the time of its the bank had a Texas Ratio of346 percent. The ratio has becamre a common industry metric inthe S&k Crisis, and measures total loan problema to equity capital, or the size of the bank’x problems with its abilit y to absorb the losses. Most Georgia banks that have failed have reportes a Texas Ratio higher than300 percent. Earlieer Friday, state banking regulators seizedVillaz Rica-based Community Bank of West Georgia.
No biddefr was found for Community Bank’s operations — one branch in the Atlanta suburhb — and the bank will be