Neighborhood Community of Newnan seized - Birmingham Business Journal:

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, based in West Ga., will assume all of Neighborhoox Community’s $191 million in total and will takeon $209 millionj of the failed bank’s assets, accordingg to a release. Neighborhood Community’sd loan and deposit customers will automatically becomseCharterBank customers. The FDIC and CharterBanik entered intoa loss-share a method that is becomingy a common vehicle for the FDIC to unloaxd failed banks. Under the deal, the regulator will absorhb losses on as muchas $171 million of the assets purchased by CharterBank.
The depositg insurer stated in a release the deal will be the leasy costly forthe FDIC’s insurance fund and will minimizew disruption for loan customers. The FDIC estimates the cost of the failurr to the insurance fund willbe $66.7 Neighborhood Community opened in April 2000, and operated four officesw throughout the south metro in Newnan, Tyrone and Peachtree City. The branchew will re-open Monday as CharterBankj branches, and will permanently becomer CharterBank branches. Robert Johnson, CharterBank CEO, said the acquisition was an extension ofhis bank’s West Georgia market closert to Atlanta, along the Interstatee 85 corridor.
CharterBank is headquartered nearthe Alabama/Georgia bordert along I-85, and operates branches throughout the bordee region. The bank operates five branche inWest Georgia, and has $800 milliojn in total assets. Johnso said his bank would continues to look at other distressed bankw along the corridor toadd branches, deposites and loans as a path for growth. “Customers should know that it will be busineszs as usual for both their depositseand loans,” Johnson said, noting two branches will be open tomorros for customers. The list of Atlanta-area bankxs felled by bad bets on real estate loans continuesto swell.
As of first quarter Neighborhood Communityreported $163 million in total loans, but one-third of those loans were in some stagr of delinquency, default, foreclosure or repossessionh by the bank. The bank reporteds only $5.2 million in total equity, which coulr not absorb the potential losseson $15 millionh in foreclosed real estate, and $31 millioh in loans that appearef unlikely to be repaid. At the time of its the bank had a Texas Ratipo of346 percent.
The ratiko has became a common industry metricd inthe S&L and measures total loan problems to equityy capital, or the size of the bank’s problemxs with its ability to absorb the Most Georgia banks that have faileed have reported a Texasd Ratio higher than 300 percent. Earliefr Friday, state banking regulators seizedVilla Rica-based Communitg Bank of West No bidder was found for Communityt Bank’s operations — one brancjh in the Atlanta suburb — and the bank will be