Georgian Bank Closed, Acquired by First Citizens of S.C.

NCUA Takes Over Keys Federal Credit Union in FL. One bank and one credit union fell victim to the economy this past week.

On Friday, federal and state regulators closed Georgian Bank, Atlanta, Georgia. And on Thursday, the Keys Federal Credit Union of Key West, FL. was placed under conservatorship.

The year's running tally of failed institutions now stands at 107 banks and credit unions that have been closed, acquired or placed under conservatorship.

Georgian Bank was closed by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The FDIC then entered into a purchase and assumption agreement with First Citizens Bank and Trust Company, Inc., Columbia, South Carolina, to assume all of the deposits of Georgian Bank.

The five branches of Georgian Bank will reopen on Monday as branches of First Citizens Bank. Depositors of Georgian Bank will automatically become depositors of First Citizens Bank.

As of July 24, 2009, Georgian Bank had total assets of $2 billion and total deposits of approximately $2 billion. In addition to assuming all of the deposits of the failed bank, First Citizens Bank agreed to purchase essentially all of the assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $892 million.

The National Credit Union Administration (NCUA) on Thursday assumed control of service and operations at Keys Federal Credit Union of Key West, Florida.

Service to Keys Federal Credit Union 13,000 members will continue uninterrupted. Members can continue to conduct normal financial transactions - deposit and access funds, make loan payments and use share drafts. Keys FCU is a full service credit union with assets of $180 million. The decision to conserve a credit union enables the institution to continue normal operations with expert management in place, correcting previous service and operational weaknesses.

The Federal Credit Union Act authorizes the NCUA Board to appoint itself conservator when necessary to conserve the assets of a federally insured credit union, protect members' interests or protect the NCUSIF.

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