Community Bank of Rockmart, Rockmart, Georgia, was closed today by state regulators who appointed the FDIC as receiver. Century Bank of Georgia, Cartersville, GA, entered into a purchase and assumption agreement with the FDIC under which it will assume all deposits of failed Community Bank of Rockmart.
Since banks are closed on Friday in observance of Veteran’s Day, Community Bank of Rockmart’s sole branch will reopen on Saturday as a branch of Century Bank and all depositors of Community Bank will automatically become depositors of Century Bank. All depositors of failed Community Bank will continue to have full FDIC deposit insurance coverage up to the applicable limits. Depositors of Community Bank will have continued access to their money through the use of checking, ATM and debit cards.
Community Bank of Rockmart had total assets of $62.4 million and total deposits of $55.9 million as of September 30, 2011. Century Bank will purchase only $40.7 million of Community’s assets leaving the FDIC with the task of disposing of the remaining assets of $21.7 million.
Community Bank of Rockmart was opened at the peak of the real estate bubble in 2005 by members of the local community. The Bank prided itself on its local roots and from a standing start rapidly grew its loan portfolio which was focused heavily on commercial real estate. As real estate prices crumbled during the financial crisis of 2008, Community Bank saw a rapid acceleration in delinquencies.
Almost a third of the Bank’s loan portfolio quickly became delinquent. Community Bank’s troubled asset ratio skyrocketed to 367% by the end of 2010 and the Bank’s failure became a virtual certainty. Once a bank’s troubled asset ratio exceeds 100%, the likelihood of failure is almost 100%.
Community Bank of Rockmart is the nation’s 88th banking failure of 2011 and the 23rd in Georgia, which leads the nation in banking failures. The cost to close failed Community Bank is $14.5 million.