Atlanta Bank Fails
CVN News
09-01-2008
The Federal Deposit Insurance Corporation (FDIC) declared
Integrity Bank of Alpharetta insolvent late Friday afternoon.
The FDIC then approved the assumption of approximately
$900 million in deposits, including all uninsured deposits,
by Regions Bank.
Under terms of an agreement between the FDIC and Regions,
it will serve the approsimately 23,000 accounts held by
Integrity prior to the takeover and will also be in
charge of operations of Integrity`s five branches
when they reopen on Tuesday. Regions may retain some of
Integrity`s employees.
Integrity becomes the 10th bank nationwide to be declared
insolvent by the FDIC. It has approximately $1 billion
in assents. The FDIC is estimating that it will lose
between $250 and $350 million as a result of the
closure.
Construction loans made up 76 percent of the bank`s loans
The bank lost over $30 million in the second quarter.
There are a number of reports circulating that the FDIC
is running out of short-term money and will have to
borrow more from the U.S. Treasury. Some of that
money will be repaid once the FDIC disposes of assets
from the failed banks. The agency may also have to raise
the fees that it charges banks, which will put further
pressure on the banking industry.
The agency may raise its rates on banks that it views
as engaging in `risky` lending practices. While that
may help reduce future losses, it could also result
in banks being more reluctant to make all kinds of loans.
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