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Feds close two banks, one in Georgia

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POSTED: December 28, 2008 5:00 a.m.
NEW YORK - Regulators on Friday closed Haven Trust Bank, the fifth bank failure this year in Georgia.

Also closed was Sanderson State Bank in Texas, bringing to 25 the number of U.S. bank failures in 2008.

The Federal Deposit Insurance Corp. was appointed receiver of the Duluth, Ga.-based Haven Trust Bank, which had total assets of $572 million and deposits of $515 million as of Dec. 8.

The FDIC said Winston-Salem, N.C.-based BB&T Corp. has agreed to assume all of the bank's deposits, including those that exceeded the insurance limit, for $112,000. BB&T will also buy about $55 million of the failed bank's assets; the FDIC will retain the rest for later disposition.

The four branches of Haven Trust Bank will reopen on Monday as BB&T branches, and deposits will continue to be insured by the FDIC. Regular deposit accounts are now insured up to $250,000 as part of the financial rescue law enacted in early October.

The agency said depositors will continue to have full access to their money.

The FDIC estimated that the resolution of Haven Trust Bank will cost the federal deposit insurance fund $200 million.

The 24 U.S. bank failures so far this year compare with three for all of 2007 and are far more than in the previous five years combined. It's expected that many more banks won't survive the next year of economic turmoil. The pressures of tumbling home prices, rising foreclosures and tighter credit have been battering financial firms nationwide.

In late September, Seattle-based thrift Washington Mutual Inc. became the biggest bank to collapse in U.S. history. It had $307 billion in assets. Its banking operations were acquired by JPMorgan Chase & Co. for $1.9 billion.

Of the roughly 8,500 federally insured banks and thrifts, the FDIC had 171 on its confidential list of troubled institutions as of Sept. 30 - a nearly 50 percent jump from the second quarter and the highest tally since late 1995.


 

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