Feds Shut 26th Bank of the Year
Saturday 25 April 2009
By IEVA M. AUGSTUMS
, AP
posted: 11 HOURS 5 MINUTES AGO
filed under: FINANCIAL CRISIS
CHARLOTTE, N.C. (April 24) - Regulators on Friday shut down American Southern Bank in Georgia, boosting the number of failures this year to 26 - more bank closures than in all of last year.
The Federal Deposit Insurance Corp. was appointed receiver of the bank, based in Kennesaw, Ga. It had about $112.3 million in assets and $104.3 million in deposits as of March 30.
The FDIC said a majority of the bank's deposits will be assumed by Bank of North Georgia, based in Alpharetta, Ga. Bank of North Georgia will not assume $48.7 million in brokered deposits held by American Southern Bank. The FDIC said it will pay the brokers directly for the amount of their funds.
In addition to acquiring $55.6 million of the failed bank's deposits, Bank of North Georgia agreed to purchase approximately $31.3 million in assets. The FDIC will retain the rest for eventual sale.
American Southern Bank branches will reopen Monday as offices of Bank of North Georgia.
American Southern Bank customers can still write checks and use ATM or debit cards, and loan customers should continue to make their payments as usual. The FDIC will continue to insure deposits. Regular deposit accounts are insured up to $250,000.
The latest bank to fail in Georgia was Omni National Bank in Atlanta on March 29.
The list of bank failures is growing as falling home prices and rising unemployment cause more individuals and businesses to default on their debt.
The failures have sapped billions from the deposit insurance fund. It now stands at its lowest level in nearly a quarter-century, $18.9 billion as of Dec. 31, compared with $52.4 billion at the end of 2007.
The FDIC expects that bank failures will cost the insurance fund around $65 billion through 2013.
The 26 bank collapses this year follow 25 failures in 2008, which included two of the biggest savings and loans, Washington Mutual Inc. and IndyMac Bank. Last year's total was more than in the previous five years combined and up from only three failures in 2007.
The FDIC had 252 banks and thrifts on its list of troubled institutions at the end of 2008, up from 171 in the third quarter.
American Southern Bank customers with questions can call the FDIC toll-free at 800-323-6111.
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