Here we go again: Two more Georgia banks shut down

First Georgia Banking Company of Franklin and Atlantic Southern Bank of were shut down by regulators this evening.

From the FDIC press release:

CertusBank, National Association, Easley, South Carolina, acquired the banking operations, including all the deposits, of Atlantic Southern Bank, Macon, Georgia, and First Georgia Banking Company, Franklin, Georgia. The two banks were closed today by the Georgia Department of Banking and Finance, which appointed the FDIC as receiver for each institution. To protect depositors, the Federal Deposit Insurance Corporation (FDIC) entered into purchase and assumption agreements with CertusBank, N.A.

All 26 branches of the two closed banks will reopen during their normal business hours beginning Saturday as branches of CertusBank, N.A. Depositors of the two failed banks will automatically become depositors of CertusBank, N.A. 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. Atlantic Southern Bank had 16 branches, and First Georgia Banking Company had 10 branches.

Customers of the two failed banks should continue to use their former branches until they receive notice from CertusBank, N.A. that it has completed systems changes to allow other branches of CertusBank, N.A. 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 March 31, 2011, Atlantic Southern Bank had total assets of $741.9 million and total deposits of $707.6 million; and First Georgia Banking Company had total assets of $731.0 million and total deposits of $702.2 million. Besides assuming all the deposits from the two Georgia banks, CertusBank, N.A. will purchase essentially all of their assets.

These are the 41st and 42nd bank failures in the U.S. in 2011, and there have now been 12 failures in Georgia, which leads the nation. The FDIC is well behind the pace of bank closures I predicted for 2011; it will be interesting to see what happens the rest of the year, since the number of problem banks under FDIC scrutiny is close to 1,000.

As I’ve noted multiple times in this blog, Georgia also leads the nation in bank failures since the recession began in 2007. There has so far been no political will to examine the most basic of questions: how did state policies that allowed the proliferation of new banks during the boom contribute to the current banking bust?

Someday, we’ll also see some really interesting papers by economists about the additional drag to the state economy caused by all these struggling and failed banks.

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