Integrity Bank located in Alpharetta Georgia has just failed. In a breaking story from Bloomberg reports that Integrity Bank was closed today by the Federal Deposit Insurance Corporation FDIC and the Georgia Department of Banking and Finance. Integrity Bank Becomes 10th U.S. Failure This Year. It is reported that Regions Financial Corp. will be assuming the assets. Integrity Bankshares which controls all the assets of Integrity Bank and its 5 branches will open on September 2, 2008 as Regions Banks. Integrity Bank has been on the Federal banks watchlist, and have been unable to raise new capital that the FDIC required.
The twist to this failure is that the FDIC reported that all depositors even those with accounts in excess of $100000 will automatically become depositors of Regions Bank for the full amount of their deposits. This is the second bank to fail in Alpharetta in less than one year. The other banks was NetBank which failed last September.
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Wow. This is scary, and interested all in the same blog. nice post. What should we take from this?
So if I read this correctly that the FDIC is backing full deposits regardless of balance .. guess that is a positive thing to note.
Robert Worthington (Worthington Realty) Well for one thing, this is much worse that anyone is letting on. This is the 2nd Bank Failure in Alpharetta since NetBank also located in Alpharetta failed last Sept 2007. What does it tell you when 2 banks in one small town are closed in less that a year? It isn't just coincidence, it is also reflective of the health of the local economies. Real estate here can reflect that in local banks bad commercial investments, builder failures, bankruptcies and assets that are worth less than what is on the books are placing banks upside down. It places investors monies at risk.
Eric Reid Lawrenceville,GA (Renaissance Realty Group) The story is still breaking on a holiday weekend, so it is interesting to hear that. I would like to find more details on this. I do agree, if that is the case, it is good news for depositors.
This is becoming a regular Friday routine. With the exception of IndyMac, FDIC has had a ready purchaser.
Did you read the articles about the likelihood or unlikelihood of FDIC needing to borrow from the Treasury?
Richard
Richard Smith Mortgages Home Loans FHA TN GA AL (American Acceptance Mortgage, Inc) Yes that is even scarier. The most recent stories I've come across is that the FDIC are building up staff in certain states. Texas I believe is one of them. I do not know if it is a regional thing or what. They have added 140 to their bank closures staff this year. I think they should double or triple the FDIC insured coverage to instill confidence in the banks. Wouldn't it be a smart thing if they told all depositors that you are insured up to 250K or 500K? It would solve a lot of problems wiht banking confidence.
There is a lot of difference between this and IndyMac. IndyMac didn't have another bank take over their assets. FDIC took over. FDIC covers deposits up to maximums depending on type.
When another bank takes the assets, they take the deposits and the FDIC doesn't have to make any payout.
This is always the best remedy for failing banks. IndyMac was different because of the RUN ON THE BANK caused by Charles Schumer's big mouth.
Lenn Harley, Homefinders.com, MD & VA Real Estate I agree, but it is the second bank in Alpharetta in 11 months that has fails so it hits close to home. I am sure most of their loans are commercial loans and mortgages. I think it is a good thing that that Regions bank took them over and that I hope no one lost anything. Schumer should be censured for causing that run on the bank! I understand California is not going to investigate his comments any further.
Well as painful as it is, I think this market correction is going to weed out the weak and make us all stronger and smarter in the end. It's painful though, that's for sure.
Donna Yates, Georgia Realtor North Georgia Blue Ridge Real Estate (Mountain Investments of North Georgia) It is, but I think this is just starting. Commercial loans are just coming on board for late and no pays. I wish we were closer to the end of the tunnel.