My friends in Henry County will probably take interest in this story. The FDIC has shut down the First State Bank, a Stockbridge-based bank that had been on the “watch list” for some time:
The First State Bank, the last remaining bank based in Henry County, was seized and sold Friday by regulators.
Hamilton State Bank, based in Hoschton, acquired First State and its seven Henry branches in a loss-share transaction with the Federal Deposit Insurance Corp. Those branches will reopen under normal business hours beginning Saturday.
[...]
Hamilton State assumed all of First State’s $527.5 million in deposits and the bulk of its $536.9 million in assets from the FDIC. The FDIC said the failure will cost its Deposit Insurance Fund, the backstop that protects deposits, $216.2 million.First Bank officials tried to hold on through the real estate crisis, said Walt Moeling, a bank attorney with Bryan Cave in Atlanta. But, he said, the bank could no longer absorb losses from struggling borrowers, nor withstand plummeting real estate values, worsened in part by the local failures.
Like I said, I don’t think this is a real surprise. Based on conversations I’ve had with people, it wasn’t a matter of “if” the bank would be shut down, rather “when.” The measure for a troubled financial institution is called the “Texas ratio.” The higher the scale, the worse things are — with 100% being considered the measure of a failing institution. First State Bank’s “Texas ratio,” according to the latest statistics I can find, was 870.17%. So yeah, they were well into failing territory.
I am glad the new bank is going to keep the employees. I banked with First State for a long time and I will remain with Hamilton State as long as things go as well as the transfer has done.