The Atlanta Journal-Constitution
Friday, March 20, 2009
FirstCity Bank in Stockbridge was closed Friday by state regulators, becoming the eighth Georgia bank to fail in the past seven months.
The small bank, founded in 1905, collapsed amid a rising tide of bad loans tied to the battered real estate market. Last year, FirstCity lost $8.3 million and reported $24.5 million in non-performing loans, a four-fold increase from the year before.
Federal regulators were unable to find a buyer for the bank’s operations, a first for a Georgia bank during the current crisis. The Federal Deposit Insurance Corp. will mail checks to depositors on Monday for insured funds — up to $250,000 for each account. Any customers with accounts exceeding the limit have been directed to contact the FDIC at 1-877-367-2719.
At the time of the closing, FirstCity had $278 million in deposits, including about $778,000 that exceeded the insurance limits.
The FDIC estimates the failure will cost its insurance fund about $100 million. The most recent Georgia bank to fail was Freedom Bank of Georgia in Commerce, which was seized on March 6.
FirstCity had three branches in Stockbridge, McDonough and Gibson. The bank was hit with an enforcement action in February, prohibiting the bank from paying dividends, issuing debt or purchasing shares of its stock.
The bank made a recent list of troubled institutions using a measure called the “Texas ratio,” which attempts to gauge a bank’s health. A score above 100 is considered problematic. FirstCity had a score of 315 as of the fourth quarter, the sixth-highest score in the state.
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