Weekend Economists Clean Out Davy Jones' Locker, March 2-4, 2012

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5. AND ANOTHER GEORGIA BANK BITES THE DUST

Global Commerce Bank, Doraville, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Metro City Bank, Doraville, Georgia, to assume all of the deposits of Global Commerce Bank.

The three branches of Global Commerce Bank will reopen during their normal business hours beginning Saturday as branches of Metro City Bank...As of December 31, 2011, Global Commerce Bank had approximately $143.7 million in total assets and $116.8 million in total deposits. In addition to assuming all of the deposits of the failed bank, Metro City Bank agreed to purchase approximately $79.0 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $17.9 million. Compared to other alternatives, Metro City Bank's acquisition was the least costly resolution for the FDIC's DIF. Global Commerce Bank is the 12th FDIC-insured institution to fail in the nation this year, and the third in Georgia. The last FDIC-insured institution closed in the state was Central Bank of Georgia, Ellaville, on February 24, 2012.