NEWS - Banking & Finance

SBJ Staff Report

Jan 23, 2012 - After a two month break, another Georgia bank was closed on Friday, The First State Bank, in Stockbridge. The Hamilton State Bank in Hoschton assumed all of the deposits, in an agreement with the FDIC.

As of 9/30/2011, The First State Bank had approximately $536.9 million in total assets and $527.5 million in total deposits, a large community bank by Georgia standards.

The former The First State Bank locations will reopen today as branches of Hamilton State Bank during regular business hours.

All shares of The First State Bank were owned by its holding company, Henry County Bancshares, Inc., of Stockbridge, GA. The holding company was not included in the closing of the bank or the resulting receivership.

Hamilton State Bank has agreed to pay the FDIC a premium of 0.50 percent on all assumed deposits, but the FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $216.2 million, according to the FDIC Southeast’s office headquartered in Jacksonville.

The First State Bank is the first Georgia bank to be closed in the first few weeks of 2012.  In the Savannah area, there are at least three banks operating under letters of agreement with the FDIC that call for increasing their capitalization versus troubled loans, and enhancing management procedures including First Chatham Bank, The Heritage Bank, and The Coastal Bank.

On January 31, all banks in the U.S. must report their 4^th Qtr. financial results which will provide more insight into the progress being made by Georgia banks to work through troubled residential and commercial loan portfolios.