Jasper-based Crescent, with 11 branches in Bartow, Cherokee, Cobb, Forsyth, Fulton and Pickens counties, had more than $1 billion in assets, including the $600 million in loans and other real estate transferred to Renasant, making it the largest bank in north Georgia to fail this year. Renasant also assumed about $900 million in Crescent deposits in a loss-sharing transaction expected to cost the Federal Deposit Insurance Corporation's Deposit Insurance Fund more than $240 million.
Formed in 1989 by a group of Pickens County business and civic leaders, Crescent lost more than $30 million in both 2008 and 2009, and more than $13 million in the first quarter of 2010.
FDIC uses capital ratios to measure a bank's viability, and financial institutions regulated by the agency must stay above certain levels to remain adequately capitalized. Considered so at the end of 2007, Crescent's ratios dipped below the requirements by the end of 2008 as problem loans grew and loan loss reserves plummeted, and those ratios continued to go down in 2009 and during the first quarter of this year.
"Crescent Bank experienced significant losses on its acquisition, development and construction loans, which are loans to developers, and commercial real estate loans. That coupled with the weak real estate conditions put a strain on Crescent Bank's finances to a point where it had to be closed to protect depositors," FDIC spokesperson David Barr said in a Saturday phone interview.
Renasant's acquisition represents its move into the north Georgia market. The Mississippi-based bank, mortgage, financial services and insurance business now operates more than 75 offices in Mississippi, Tennessee, Alabama and Georgia, including two Cartersville locations and one Adairsville branch.
Mark Williams, who is poised to become Renasant's regional president for Georgia operations, said Saturday the company plans to keep former Crescent workers employed. Although he could not say how many people worked for Crescent, its March 31 filing with FDIC indicates there were 169 full-time equivalent employees at that time.
"We do not have a presence in Georgia, and our goal is to keep all the employees that we can. We are going to be looking for all good people, retail sales people, people in back-office [operations]. We've got needs for a lot of people to do a lot of things so the best place for us to start is with the current employees of Crescent Bank," Williams said. "We're working through the [transition] but it's our goal to retain as many of them as we can. I think we're going to look to retain everybody.
"This bank's been working through problems. Our goal is to turn [it] around and get them back to banking and look for growth, so as those opportunities happen we will be expanding."
Williams said Renasant officials Saturday visited former Crescent branches, meeting and greeting customers and welcoming them to the new operation.
"Our hope is that all those customers will stay with us," he said. "Renasant is well above the high-capitalized level in the three capital ratios regulators and others look to, so there is no danger of Renasant going anywhere. We're excited to be here.
"When you look at our markets in Mississippi and Alabama and even in Tennessee, this market that Crescent has is a good mirror image, and it's banking that we think we understand. Crescent was a 21-year-old bank so it had a lot of good banking at its core, and the collapse in the construction and development caught them," he added. "We believe the opportunity is here to do small business, commercial and industrial, consumer banking is tremendous and we think Crescent has the ability to help us do that."
In a Friday press release, Renasant officials said Crescent clients should expect business as usual, and can access their money by writing checks or using ATM or debit cards. Outstanding checks will be processed as usual, and customers can continue using Crescent instruments.
Renasant, the fourth expansion of which since 2004 is Crescent, also announced Friday the completion of a $54.95 million capital increase through the private placement of nearly 4 million shares of common stock.
Number of bank failures in U.S. reaches triple-digits
As Georgia Department of Banking and Finance shut down Georgia's Crescent Bank and Trust on Friday, FDIC announced the failure of six other banks across the country, bringing the national total for 2010 to 103. That pace is ahead of that of 2009, with 140 shut down amid mounting loan defaults.
Crescent was the 98th FDIC-insured institution to fail in the nation this year and the 10th in Georgia. Inadequate capital ratios also drove the March closing of Unity National Bank, the deposits of which were assumed by Bank of the Ozarks, which now operates branches in Cartersville and Adairsville.
In 2009, the state saw 25 bank failures, with several Atlanta-based institutions and one in Kennesaw going under. Many small and mid-sized banks are expected to continue suffering in the coming months and years, as losses on loans to businesses and developers that have closed up shop during the recession drive down capital.
Depositors' money -- insured up to $250,000 per account -- is not at risk, as FDIC is backed by the government.
-- Information from The Associated Press was used in this report.