Here we go again: another Georgia bank failure

Another Georgia bank failed today, a regular Friday routine of the last couple of years.

More banks have failed in Georgia since the real estate bubble burst than in any other state.

Today, Mountain Heritage Bank in Clayton, Georgia was closed by regulators. Clayton is a small town in Rabun County in the extreme northeast corner of the state. According to the FDIC press release:

The two branches of Mountain Heritage Bank will reopen during normal business hours as branches of First American Bank and Trust Company. Depositors of Mountain Heritage Bank will automatically become depositors of First American Bank and Trust Company.[. . .]

As of March 31, 2011, Mountain Heritage Bank had approximately $103.7 million in total assets and $89.6 million in total deposits. In addition to assuming all of the deposits of the failed bank, First American Bank and Trust Company agreed to purchase essentially all of the assets.[. . .]

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $41.1 million. Compared to other alternatives, First American Bank and Trust Company’s acquisition was the least costly resolution for the FDIC’s DIF. Mountain Heritage Bank is the 48th FDIC-insured institution to fail in the nation this year, and the fourteenth in Georgia.

As I keep saying, Georgia’s leaders need to scrutinize the policies that led to this national embarrassment.