The number of bank failures receded to five in May following a
sharp jump to 13 in April, according to New York-based Trepp LLC.
Three of the bank failures occurred in the Southeast, including two
in Georgia and one in Florida. Two of the failures occurred in the
state of Washington.
Georgia continues to lead the country in bank failures, with 12
during the first five months of 2011, and 64 since the cycle
started in 2007.
The five failed institutions include First Heritage Bank and
Summit Bank in the State of Washington, First Georgia Banking Co.
and Atlantic Southern Bank in Georgia, and Coastal Bank in
Commercial real estate loans accounted for $152 million (or 76%)
of the total $201 million in nonperforming loans of the five failed
banks in May. Construction and land loans made up $109 million, or
54% of the total, while commercial mortgages accounted for $44
million (22%) of the total nonperforming pool.
The residential real estate loan category was second, with $31.4
million in nonperforming loans, or 16% of the total nonperforming
balance. The remainder was comprised of commercial and industrial
loans ($5.8 million, 3% of the total) and consumer and other loans
($11.1 million, 6% of the total).
All the failures in May involved loss-sharing agreements with
the Federal Deposit Insurance Corp., with 73% of the assets
acquired being covered via loss-sharing agreements. The proportion
of loss-share assets is up from 67% in April.
Trepp analysts say that the prevalence of loss-sharing
agreements indicates that buyers continue to exercise caution in
failed bank acquisitions.