The FDIC has closed the doors to Covenant Bank in Rock Spring, GA on Friday. Covenant Bank was Walker County’s 3rd largest bank and was open since 2006. From the Chattanooga Times Free Press:
The two-branch bank, with assets of about $95.7 million, will reopen Monday as a branch of Stearns Bank, National Association, based in St. Cloud, Minn., according to the Federal Deposit Insurance Corp.
The Georgia Department of Banking and Finance pulled Covenant Bank’s charter and closed the bank, said FDIC spokesman Greg Hernandez.
The FDIC and Stearns Bank entered into a loss-share transaction on $71.6 million of Covenant’s troubled assets. Hernandez said that figure was the estimate of how much it would cost the deposit insurance fund if the bank was liquidated.
Covenant depositors automatically will become Stearns Bank customers. Covenant deposits, put at about $90.6 million, will continue to be insured by the FDIC.
Over the weekend, the FDIC said Covenant depositors can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed, while loan customers should make their payments as usual.
The bank will maintain its regular business hours, and customers may continue to use the services to which they previously had access, such as safe deposit boxes, night deposit boxes, and wire services, according to the FDIC.
Covenant Bank opened in 2006 and was the third largest bank in Walker County, Ga. It also has a branch in Dalton, Ga.
I had heard that Covenant Bank had been on the FDIC’s watch list for a few months. This makes for the 4th bank closure in Georgia so far this year. 15 banks have been closed so far nationwide by the FDIC in 2012. The closure list can be found over at the FDIC’s website.
Alan Painter passed along this presser from the Superior Court in Walker County that appointed the FDIC as receiver of Covenant Bank:
Atlanta, Georgia – The Georgia Department of Banking and Finance (“Department”) took possession of Covenant Bank & Trust, Rock Spring, Georgia on March 23, 2012. The Superior Court of Walker County issued an Order appointing the Federal Deposit Insurance Corporation (“FDIC”) as Receiver of the Bank effective upon the Department taking possession of Covenant Bank & Trust.
The Department took possession of Covenant Bank & Trust pursuant to the Official Code of Georgia, Section 7-1-150(a) which authorizes the Department in its discretion to take possession of the business and property of any state chartered financial institution whenever such financial institution is either insolvent or operating in an unsafe or unsound condition to transact its business, is operating in violation of any court order, statute, rule or regulation, or requests the Department to take possession of its business and property.
Through an agreement with the FDIC, Covenant Bank & Trust will be acquired byStearns Bank, N.A., St. Cloud, Minnesota.
All deposit accounts of Covenant Bank & Trust have been transferred to Stearns Bank, N.A. and will be available immediately. Depositors will be able to access their accounts at the former main office and branch location of Covenant Bank & Trust during regular business hours. Customers of both banks should continue to use their existing branches until Stearns Bank, N.A. can fully integrate the deposit records of Covenant Bank & Trust. Additionally, the former depositors of Covenant Bank & Trust can continue to access their accounts through automated teller machine transactions, checks and debit transactions.
All deposits will be transferred to Stearns Bank, N.A. and, therefore, it is not anticipated that there will be any loss exposure to former Covenant Bank & Trust depositors that have deposits exceeding the FDIC Deposit Insurance amounts.
The Department’s Commissioner, Robert M. Braswell, reminds depositors that deposits of all Georgia banks are insured by the FDIC up to $250,000. Special rules are in place for accounts held in trust status and joint accounts that may further expand deposit insurance coverage. Additional information on FDIC Deposit Insurance may be found at www.fdic.gov.
The FDIC has established a website and a toll-free phone number to answer questions from depositors, creditors and other interested parties regarding the receivership of Covenant Bank & Trust. Please refer to the FDIC’s website for further information regarding the details of the purchase and assumption transaction. The website is http://www.fdic.gov/bank/individual/failed/covenant.html and the toll-free phone number is 1-800-537-4048. The phone number is operational this evening until 9 p.m. Eastern Standard Time, on Saturday from 9 a.m. until 6 p.m., on Sunday from noon to 6 p.m., on Monday from 8 a.m. to 8 p.m.; and thereafter from 9:00 a.m. to 5:00 p.m.