Two more Georgia banks shut down by the FDIC

Georgia has had more bank failures than any other state during this economic downturn, and we’re leading the rest of the country for 2011.

The FDIC has closed five banks tonight, two in Georgia: The Park Avenue Bank of Valdosta and First Choice Community Bank of Dallas.

From the FDIC press release:

Bank of the Ozarks, Little Rock, Arkansas, acquired the banking operations, including all the deposits, of two Georgia-based banks. To protect depositors, the Federal Deposit Insurance Corporation (FDIC) entered into purchase and assumption agreements with Bank of the Ozarks.

First Choice Community Bank, Dallas, Georgia, and The Park Avenue Bank, Valdosta, Georgia, were closed today by the Georgia Department of Banking and Finance, which appointed the FDIC as receiver.

All 19 branches of the two closed banks will reopen during their normal business hours beginning Saturday as branches of Bank of the Ozarks. Depositors of the two failed banks will automatically become depositors of Bank of the Ozarks. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. First Choice Community Bank had seven branches in Georgia; and The Park Avenue Bank had eleven branches in Georgia and one branch in Florida.

Customers of the two failed banks should continue to use their former branches until they receive notice from Bank of the Ozarks that it has completed systems changes to allow other branches of Bank of the Ozarks to process their accounts as well. Over the weekend, depositors can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of December 31, 2010, First Choice Community Bank had total assets of $308.5 million and total deposits of $310.0 million; and The Park Avenue Bank had total assets of $953.3 million and total deposits of $827.7 million. Besides assuming all the deposits from the two Georgia banks, Bank of the Ozarks will purchase essentially all of their assets.

As of this moment, 39 banks have failed in 2011, 10 of which were based in Georgia.

As I have noted repeatedly, it’s an obvious failure of Georgia’s leaders that there has been so little interest in examining the regulatory climate that allowed so many banks to open and to make risky loans in the last decade. We could easily see a few dozen more Georgia banks fail over the next couple of years.