Georgia’s Community Bank Succumbs to C&D Exposure

Loganville, Ga.-based The Community Bank was closed Friday by the Georgia Department of Banking and Finance, becoming the latest bank to head into the hands of the Federal Deposit Insurance Corporation. The failed bank’s deposits will be assumed by fellow Georgia banking institution Bank of Essex, according to an FDIC statement late Friday.

The Community Bank was just that — a community bank with four branches and total assets of $681.0 million. Bank of Essex acquired $611.4 million in deposits and approximately $84.4 million in other assets, as well as paying a $3.2 million premium to the FDIC. The bank failure is the 20th this year, and the third in Georgia.

Despite all that was sold off, at a premium no less, the failure will still cost the deposit insurance fund between $200 and $240 million, the FDIC estimated — a trend that still has yet to garner notice in coverage outside of HousingWire.

And, like many other banks before it, The Community Bank was heavily involved in construction and development lending. So-called C&D lending has become particularly toxic for smallers banks that steered clear of subprime lending, and a look at the most recent call report data from the FDIC shows just how toxic it was in this case: of the bank’s reported $505.8 million in total loans and leases, $335.4 was in the form of C&D loans.

Here’s the kicker: of that total, more than $150 million was in non-accrual status at the end of September, the bank reported.

Write to Paul Jackson at paul.jackson@housingwire.com.