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U.S. closes banks in Georgia and Washington state

WASHINGTON (Reuters) - U.S. authorities closed two small banks in west-central Georgia and one in Washington state on Friday, bringing the number of foreclosures in 2011 to 43.

CertusBank, a subsidiary of Blue Ridge Holdings Inc, bought the Georgia banks. Blue Ridge is led by former Bank of America Corp and Wachovia Corp executives who want to build a regional bank in the U.S. Southeast.

The new acquisitions were Atlantic Southern Bank of Macon, and First Georgia Banking Company of Franklin. Atlantic Southern Bank had assets of $741.9 million and First Georgia Banking had assets of $731 million as of March 31.

Blue Ridge was formed last year with $500 million from investors. In January, it bought a South Carolina bank that regulators closed.

Together, Atlantic Southern and First Georgia Banking had 26 branches, which will reopen on Saturday as branches of CertusBank. The Federal Deposit Insurance Corp, the receiver of closed banks, said it entered into loss-share transactions with CertusBank totaling $1 billion.

Regulators also closed Summit Bank, of Burlington, Washington, about 50 miles north of Seattle. Columbia State Bank, of Tacoma, Washington, purchased the bank, which has three branches and had $142.7 million in assets.

In 2010, 157 banks failed following 140 failures in 2009. The bulk of the failures have increasingly been smaller institutions, those with less than $1 billion in assets, as large banks have recovered more quickly from the 2007-2009 financial crisis.

FDIC Chairman Sheila Bair has said the agency expects the number of failures to fall in 2011.

Community banks are struggling with the weak economy and many are facing problems related to their exposure to the commercial real estate market.

Next week the FDIC will give an update on the health of the banking industry when it releases its quarterly report on May 24.

The agency announced last month it expects that future bank failures will cost the government less than previously estimated.

The agency said on April 12 it is now estimating bank failures will cost the industry-funded insurance fund about $45 billion from 2010 through 2014, compared with a prior estimate of $52 billion.

(Reporting by Charles Abbott)

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