Saturday, October 3, 2015
After almost three months since the last bank closing regulators closed two banks on the first Friday of October. The first bank failure occurred when The Bank of Georgia, Peachtree, GA, was closed, followed shortly thereafter by the failure of the Hometown National Bank, Longview, Washington.
In order to protect depositors the FDIC sold the failed Hometown National Bank to Twin City Bank, Longview, Washington, which will assume all deposits of Hometown National Bank.
Hometown National Bank was in business for 15 years, having been established in May 2000. Despite operating for a decade and a half, Hometown National was a speck of a bank, with only one location and less than $5 million in total assets.
Considering the regulatory burden imposed on banks by the Dodd-Frank act and the need to compete against much larger banks, it is amazing that Hometown National was able to stay in business as long as it did. As of June 30, 2015, FDIC data shows that the bank had only $97,000 of bank equity capital and year to date losses were over half a million dollars.
At June 30, 2015, Hometown National Bank had only $4.9 million in total assets and $4.7 million in total deposits. Twin City Bank agreed to purchase $3.8 million of Hometown National’s assets with the remaining balance to be held by the FDIC for later disposition.
Depositors of Hometown National will have full access to their money over the weekend through the use of checking accounts, ATMs, and debit cards. The one branch of Hometown National will reopen as a branch of Twin City Bank and all depositors of the failed bank will automatically become depositors of Twin City Bank with uninterrupted FDIC deposit insurance coverage.
Hometown National Bank becomes the eight bank to failure during 2015.
The loss to the FDIC Deposit Insurance Fund for the failure of Hometown National is estimated at $1.6 million. Hometown National Bank became the eight banking failure of 2015 and the first in Washington. The last banking failure in Washington occurred in early 2013.