Regulators Close Banks in Georgia, Texas

The Federal Deposit Insurance Corporation announced late Friday the failure of two more banks, bringing the total number of U.S. bank and thrift failures during 2008 to 25.

Georgia regulators closed Haven Trust Bank of Duluth, Ga., and BB&T Corp (BBT) acquired its four branches and all of its deposits.

Meanwhile, the Texas Department of Banking shut down Sanderson State Bank of Sanderson, Texas, and the bank's single office and all deposits were taken over by The Pecos County State Bank of Fort Stockton, Texas.

The good news for depositors is that the FDIC, following its recent pattern, arranged for other institutions to assume all of the failed banks' deposits, including uninsured balances.

Haven Trust Bank

Haven Trust Bank is the fifth Georgia bank to fail during 2008. Like other shuttered institutions in that state, Haven Trust had a high concentration of commercial and residential real estate loans in the Atlanta metropolitan area. The bank had $572 million in total assets when it was closed and was assigned a D- (Weak) financial strength rating by TheStreet.com Ratings back in June, after loan quality sank in the first quarter. Haven also slipped below well-capitalized status at the end of the first quarter, since its risk-based capital ratio was 9.93%, just under the 10% regulatory threshold for a well-capitalized bank.

At the end of the third quarter, Haven's nonperforming assets, consisting of loans past due 90 days or in nonaccrual status, along with repossessed real estate, comprised 12.37% of total assets. Through the third quarter, net loan charge-offs were at a 5% annual pace to average loans, and were bound to increase. After a $12.5 million net loss for the third quarter, Haven was considered undercapitalized per regulatory guidelines, with a leverage ratio of 4.42% and a risk-based capital ratio of 6.16%.