Woodstock-Based Bank Seized, Sold

State and federal regulators seized and sold Woodstock-based CreekSide Bank on Friday.

Cumberland-based bought the two-branch bank, its deposits and its other assets under a loss-share agreement with the Federal Deposit Insurance Corp. Essentially, the federal government assumes 80 percent of the risk for losses from CreekSide loans that default.

Such bad loans overwhelmed CreekSide, according to Problem Bank List, which reported that the latest financial numbers showed the bank with a troubled asset ratio of 593 percent. Banks rarely survive if their troubled asset ratio tops 100 percent.

CreekSide was born late in the local real estate boom in mid-2006 and invested in commercial real estate and development loans.

The bank had total assets of $102.3 million and total deposits of $96.6 million as of June 30, the FDIC said in a news release announcing the demise of CreekSide and Cumming-based Patriot Bank of Georgia, which Georgia Commerce also bought.

The FDIC’s loss-share agreement with Georgia Commerce covers $69.2 million of CreekSide’s assets.

The FDIC estimates that CreekSide’s failure will cost $27.3 million.

Since the start of 2008, CreekSide had lost $16.9 million, and 41.6 percent of its loans were delinquent, in default or foreclosed at the end of June, the Atlanta Journal-Constitution reported.

The Georgia Department of Banking and Finance seized the bank under a state law authorizing it to act if a financial institution is insolvent or operating in an unsafe or unsound condition.

The Cherokee County Superior Court then appointed the FDIC the bank’s receiver to handle the sale to Georgia Commerce.

“We welcome our new customers and assure them that they will continue to receive the highest level of customer service for their personal and commercial banking needs,” Georgia Commerce CEO Mark Tipton said in a bank news release.

In addition to its in Woodstock at 100 Springfield Center Dr., CreekSide has a at 3590 Cobb Pkwy.

Both locations will open Tuesday morning, after the Labor Day holiday, as Georgia Commerce branches. Georgia Commerce already has those sites and the former Patriot Bank location in Cumming listed among its locations on its website.

The three new branches double Georgia Commerce’s locations.

All CreekSide customers are now Georgia Commerce customers, and their accounts keep the same terms they had with CreekSide.

“We want to assure the customers of these banks that their deposits are safe, sound and readily accessible,” Tipton said. “Georgia Commerce Bank is one of the strongest banks in Georgia, with a sound balance sheet and very strong capital ratios.”

In February, Georgia Commerce became the first Georgia bank to repay money from the federal government’s Troubled Asset Relief Program, and the bank opened its Buckhead branch in the spring.

The FDIC has a website devoted to information for CreekSide customers about the transition. A special FDIC phone line, 800-238-8209, will be available from 9 a.m. to 6 p.m. Saturday, noon to 6 p.m. Sunday, and daily from 8 a.m. to 8 p.m. starting Tuesday.

CreekSide is the 19th Georgia bank to fail this year and the 70th in the nation, the FDIC said.