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Hamilton State Bank acquires failed Douglas County Bank
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Regulators have closed banks in Georgia, bringing the number of U.S. bank failures this year to 10.

The Federal Deposit Insurance Corp. said on Friday it seized Douglas County Bank, based in Douglasville. The lender, which had four branches, had about $316.5 million in assets and $314.4 million in deposits.

The FDIC arranged for other banks to take over the failed banks’ deposits and purchase their assets.

Hamilton State Bank, based in Hoschton, will pay the FDIC a 0.5 percent premium to assume the deposits of Douglas County Bank.

Hamilton also agreed to buy $260.9 million in the failed lender’s assets, and entered into a loss-share transaction on $159.2 million of the assets.

All locations of Douglas County Bank will open with normal business hours beginning today under the name Hamilton State Bank. Douglas County Bank customers will have access to all of their accounts and banking operations will continue as normal.

“We are a community bank that currently serves customers from 20 banking centers throughout Georgia,” said Hamilton State Bank Chairman and CEO Robert Oliver.

“Our goal is to have all Hamilton State Bank offices operating on the same system in the months to come in order to provide streamlined, consistent service to all our customers,” Oliver added.

With the acquisition, Hamilton State Bank now has 24 branches in Barrow, Bartow, Butts, Cobb, Hall, Henry, Forsyth, Jasper, Jackson and now Douglas and Paulding counties and approximately $1.7 billion in total assets, $1.4 billion in deposits, and $219 million in total capital. Hamilton State Bancshares, Inc., the parent of Hamilton State Bank, has approximately $276 million in total capital.

U.S. bank closures have been declining since they peaked in 2010 in the wake of the financial crisis and the Great Recession.

In 2007 just three banks went under. That number jumped to 25 in 2008, after the financial 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 recession. They declined to a total of 92 in 2011.

Last year bank failures slowed to 51, but that’s still more than normal.

In a strong economy an average of only four or five banks close annually. The sharply reduced pace of closings shows sustained improvement.

From 2008 through 2011, bank failures cost the deposit insurance fund an estimated $88 billion, and the fund fell into the red in 2009. But with failures slowing, the fund’s balance turned positive in the second quarter of 2011.

By Dec. 31, it stood at $32.9 billion, up from $25.2 billion at the end of September.

The FDIC expects bank failures from 2012 through 2016 to cost $10 billion.