Regulators close 6 banks in Ga., NJ, Ohio, Wis.

[September 18, 2010]  WASHINGTON (AP) -- Regulators on Friday shut down three Georgia banks and one each in New Jersey, Ohio and Wisconsin, boosting to 125 the number of U.S. bank failures this year amid the tough economic climate and growing loan defaults.

The Federal Deposit Insurance Corp. on Friday took over the Georgia banks: Bank of Ellijay, in Ellijay, with $168.8 million in assets; First Commerce Community Bank of Douglasville, with $248.2 million in assets; and Peoples Bank, based in Winder, with $447.2 million in assets.

The FDIC also seized ISN Bank in Cherry Hill, N.J., with $81.6 million in assets; Bramble Savings Bank of Milford, Ohio, with $47.5 million in assets; and Maritime Savings Bank, based in West Allis, Wis., with assets of $350.5 million.

Community & Southern Bank, based in Carrollton, Ga., agreed to assume the assets and deposits of Bank of Ellijay, First Commerce Community Bank and Peoples Bank. In addition, the FDIC and Community & Southern Bank agreed to share losses on $602.5 million of the three failed banks' loans and other assets.

Georgia, where the meltdown in the real estate market brought an avalanche of soured mortgage loans, has been one of the hardest hit states for bank collapses. The failures of the three banks Friday brought to 14 the number of Georgia banks that have fallen this year. Also high on the list of failure-heavy states are California, Florida and Illinois.

New Century Bank, based in Phoenixville, Pa., agreed to assume the assets and deposits of ISN Bank. New Century Bank does business as Customers Bank. The FDIC and New Century agreed to share losses on $64.8 million of ISN Bank's loans and other assets.

Foundation Bank, based in Cincinnati, is assuming the assets and deposits of Bramble Savings Bank.

And North Shore Bank, based in Brookfield, Wis., agreed to acquire all the deposits of Maritime Savings Bank and $177.6 million of its assets.

The failure of Bank of Ellijay is expected to cost the deposit insurance fund $55.2 million; that of First Commerce Community Bank, $71.4 million; that of Peoples Bank, $98.9 million; ISN Bank, $23.9 million; Bramble Savings Bank, $14.6 million; and Maritime Savings Bank, $83.6 million.

With 125 closures nationwide so far this year, the pace of bank failures exceeds that of 2009, which was already a brisk year for shutdowns. By this time last year, regulators had closed 94 banks.

The pace has accelerated as banks' losses mount on loans made for commercial property and development. Many companies have shut down in the recession, vacating shopping malls and office buildings financed by the loans. That has brought delinquent loan payments and defaults by commercial developers.

[Associated Press; By MARCY GORDON]

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