FDIC shuts down another Georgia bank

From the FDIC yesterday:

Frontier Bank, LaGrange, 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 HeritageBank of the South, Albany, Georgia, to assume all of the deposits of Frontier Bank.

The nine branches of Frontier Bank will reopen during their normal business hours beginning Saturday as branches of HeritageBank of the South. Depositors of Frontier Bank will automatically become depositors of HeritageBank of the South. […]

As of December 31, 2012, Frontier Bank had approximately $258.8 million in total assets and $224.1 million in total deposits. In addition to assuming all of the deposits of the failed bank, HeritageBank of the South agreed to purchase essentially all of the assets.[…]

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $51.6 million. Compared to other alternatives, HeritageBank of the South’s acquisition was the least costly resolution for the FDIC’s DIF. Frontier Bank is the fourth FDIC-insured institution to fail in the nation this year, and the first in Georgia. The last FDIC-insured institution closed in the state was Hometown Community Bank, Braselton, on November 16, 2012.

In a perfect world, there would have been some energy expended during the current legislative session to examine how state banking regulations contributed to Georgia leading the nation in bank failures in recent years.

Good news: just four banks have failed nationwide so far in 2013. That means the vast majority of banks now under heightened regulator scrutiny are going to weather the crisis.

As Calculated Risk not so drily notes, “it took until March for a bank to fail in Georgia – the economy must be improving!”

7 comments

  1. Dave Bearse says:

    Unfortunately no one cares anymore. Depositers will pick up the $51M tab while those responsible move onto other six figure jobs in the banking industry, if they even have to get a new job.

  2. saltycracker says:

    With the Feds buying $45 billion a month of probably good loans, wonder if this group laid any off until the bank was down to the none ?

  3. The Last Democrat in Georgia says:

    “In a perfect world, there would have been some energy expended during the current legislative session to examine how state banking regulations contributed to Georgia leading the nation in bank failures in recent years.”

    …What state banking regulations? (Laughs) 🙂 Doggone it, I hate it when I miss what is always an intriguing installment of “Bank Failure Fridays”.

  4. Baker says:

    This post is from a couple days ago so maybe I’ll slide this one in to Morning Reads tomorrow, but it is bank-based so check this one out. And who knew I’d agree with Elizabeth Warren on something so quickly into her tenure.

    http://www.rawstory.com/rs/2013/03/07/warren-drug-possession-warrants-jail-time-but-money-laundering-for-cartels-doesnt/#.UTpgJ9HfhyM.facebook

    “You know, if you’re caught with an ounce of cocaine, the chances are good you’re going to go to jail,” Warren said. “If it happens repeatedly, you may go to jail for the rest of your life. But evidently, if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your own bed at night, every single individual associated with this. I think that’s fundamentally wrong.”

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