It’s Been A While: Bank Failure Friday

Peach Pundit’s server wasn’t the only thing that failed today.  The FDIC has announced that it has seized the deposits of the Security Exchange Bank in Marietta:

Security Exchange Bank, Marietta, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Fidelity Bank, Atlanta, Georgia, to assume all of the deposits of Security Exchange Bank.

The two branches of Security Exchange Bank will reopen on Monday as branches of Fidelity Bank. Depositors of Security Exchange Bank will automatically become depositors of Fidelity Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of Security Exchange Bank should continue to use their existing branch until they receive notice from Fidelity Bank that it has completed systems changes to allow other Fidelity Bank branches to process their accounts as well.

This evening and over the weekend, depositors of Security Exchange Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of March 31, 2012, Security Exchange Bank had approximately $151.0 million in total assets and $147.9 million in total deposits. In addition to assuming all of the deposits of the failed bank, Fidelity Bank agreed to purchase essentially all of the assets.

The FDIC and Fidelity Bank entered into a loss-share transaction on $102.8 million of Security Exchange Bank’s assets. Fidelity Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit:

Losses to the Deposit Insurance Fund are estimated at $34.3 Million.



  1. jiminga says:

    I follow the FDIC bank failure website each Friday evening and am always curious if FDIC ever publishes actual losses compared to estimated losses. As I understand it, loss share agreements provide for the assuming entity’s protection when the “assets” (foreclosed home and commercial loans) are sold at a loss, thereby guaranteeing a profit to the assuming institution. But what happens when the losses are greater than the “estimate? We never know, do we?

    It seems to me “The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector.” really means FDIC doesn’t want the failed loans on its books, thereby making the losses disappear onto someone else’s balance sheet.

    • John Konop says:

      I am little lost, do not people always buy assets to make a profit in the business world? Do you really think the FDIC wants more failed insitutions? No doubt big money has been made off this mess, but in truth the FDIC if anything has had a very fiscally liberal few of assets to keep banks open. Remember we changed the mark to mark rules just to keep banks open.

  2. ted in bed says:

    The customer’s lucked out. Fidelity ( is a great bank with great customer service.

  3. Dave Bearse says:

    It’s good news that the failure rate is down from two to one failure per month. That’s still a far cry from what it ought to be.

    Now that Zero Based Budgeting is in effect, when will the Georgia Banking and Finance Commission’s budget be under the miccroscope? To the casual observer, it’s a Commission that doesn’t appear to have been effective over the past half dozen years.

  4. The Last Democrat in Georgia says:

    RATS! I can’t believe that I missed yet another Bank Failure Friday.

    …How will I ever forgive myself?

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