Neighborhood Community of Newnan seized - Atlanta Business Chronicle:

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, based in West Point, Ga., will assume all of Neighborhoods Community’s $191 million in total deposits, and will take on $209 milliomn of the failed bank’s according to a release. Neighborhood Community’s loan and deposit customersz will automatically becomeCharterBank customers. The FDIC and CharterBank enterec intoa loss-share transaction, a methoc that is becoming a common vehiclr for the FDIC to unload failed Under the deal, the regulator will absorb lossesz on as much as $171 milliohn of the assets purchased by CharterBank.
The deposit insuree stated in a release the deal will be the leastr costly forthe FDIC’s insurance fund and will minimizr disruption for loan customers. The FDIC estimates the cost of the failurre to the insurance fund willbe $66.7 million. Neighborhoods Community opened in April and operated four offices throughout the soutyh metroin Newnan, Tyrone and Peachtree The branches will re-open Monday as CharterBank and will permanently become CharterBank Robert Johnson, CharterBank CEO, said the acquisitiob was an extension of his bank’s West Georgiq market closer to Atlanta, along the Interstate 85 corridor.
CharterBankj is headquartered nearthe Alabama/Georgia border alongv I-85, and operates branchesz throughout the border region. The bank operates five brancheds inWest Georgia, and has $800 millionb in total assets. Johnson said his bank would continue to look at other distressed banks along the corrido r toadd branches, deposits and loans as a path for growth. “Customersw should know that it will be busines as usual for both theirr depositsand loans,” Johnson said, notinfg two branches will be open tomorrow for customers. The list of Atlanta-ares banks felled by bad bets on real estatwe loans continuesto swell.
As of first quarterf 2009, Neighborhood Community reported $163 million in totalk loans, but one-third of those loans were in some stagdof delinquency, default, foreclosure or repossession by the The bank reported only $5.2 million in total equity, whicjh could not absorb the potential lossees on $15 million in foreclosef real estate, and $31 million in loans that appeareds unlikely to be repaid. At the time of its the bank had a Texads Ratio of346 percent.
The ratio has became a common industry metric inthe S&L Crisis, and measures totak loan problems to equity capital, or the size of the bank’s problemsd with its ability to absorb the Most Georgia banks that have failed have reportedf a Texas Ratio higher than 300 percent. Earlie r Friday, state banking regulators seizefdVilla Rica-based Community Bank of West No bidder was found for Community Bank’e operations — one branch in the Atlantaq suburb — and the bank will be