October 22, 2010 – The Gordon Bank, Gordon, Georgia, a tiny bank with only one branch and $29.4 million in assets, was closed today by the Georgia Department of Banking and Finance, which appointed the FDIC as receiver.
Morris Bank, Dublin, Georgia, entered into an agreement with the FDIC to assume all of Gordon Bank’s deposits and to purchase only about one third of failed Gordon Bank’s assets. Gordon Bank depositors will have access to their money over the weekend and will automatically become depositors of Morris Bank with no interruption in FDIC deposit insurance coverage.
The Gordon Bank, at June 30, 2010, had total assets of $29.4 million and total deposits of $26.7 million. Morris Bank paid a premium to the FDIC of .05% for the deposits of Gordon Bank, but agreed to purchase only $11.5 million of Gordon’s assets. The FDIC was forced to retain the balance of Gordon’s assets for later disposition. The FDIC currently holds about $40 billion of poor quality, failed bank assets that must be disposed of in weak real estate markets (see FDIC’s Mountain of Failed Bank Assets).
Morris Bank is a $315 million asset institution started in 1954.
The Gordon Bank is the 135th banking failure this year and the 15th in Georgia. The estimated cost to the FDIC Deposit Insurance Fund for closing Gordon Bank is $9.0 million