Failure of Georgia bank brings 2012 total to 39

[July 28, 2012]  WASHINGTON (AP) -- Regulators on Friday closed a small bank in Georgia, bringing to 39 the number of U.S. bank failures this year.

That's a slower pace than in 2011; 61 banks had failed by this time last year.

The Federal Deposit Insurance Corp. seized Jasper Banking Co., based in Jasper, Ga., with $216.7 million in assets and $213.1 million in deposits.

Stearns Bank, based in St. Cloud, Minn., agreed to assume all the deposits and purchase essentially all the loans and other assets of the failed bank.

In addition, the FDIC and Stearns Bank agreed to share losses on $106 million of Jasper Banking's assets.

The failure of Jasper Banking is expected to cost the deposit insurance fund $58.1 million.

Georgia has been one of the states hit hardest by bank failures. Regulators shuttered 23 banks in the state last year. The failure of Jasper Banking brings the number of bank failures in Georgia this year to nine.

California, Florida and Illinois also have seen numerous bank failures.

The pace of bank closures has slowed sharply since peaking in 2010 in the wake of the financial crisis. In 2007, just three banks went under. That number jumped to 25 in 2008, after the meltdown, and ballooned to 140 in 2009.

In 2010 regulators seized 157 banks, the most in any year since the savings and loan crisis two decades ago. The FDIC has said 2010 likely was the high-water mark for bank failures from the Great Recession.

From 2008 through 2011, bank failures cost the fund an estimated $88 billion. The deposit insurance fund fell into the red in 2009. But with failures slowing, the fund's balance turned positive in the second quarter of last year. By Dec. 31, it stood at $11.8 billion, according to the FDIC.

The FDIC expects failures from 2012 through 2016 to cost $12 billion.

[Associated Press]

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.