The souring housing market has boosted the failed bank tally to 23 for the year.
The $237.5 million-asset First Georgia Community Bank became the latest bank to go belly up when it was shuttered by regulators Friday.
From the FDIC:
First Georgia Community Bank, Jackson, Georgia, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with United Bank, Zebulon, Georgia, to assume all of the deposits of First Georgia Community Bank.
The four branches of First Georgia Community Bank located in Jackson, Covington, Griffin and Locust Grove will reopen on Saturday as branches of United Bank. Depositors of the failed bank will automatically become depositors of United Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage. Customers of the failed bank should continue to use their existing branches until further information is received from United Bank.
The bank’s downfall was rooted in aggressive geographic expansion and too much exposure to the real estate market, the Atlanta Business Chronicle reported.
From the Atlanta Business Chronicle:
In third quarter, [First Georgia Community Bank] reported $150 million in total loans and $50 million in loans in nonaccrual status, or loans that are no longer accruing interest on the bank's balance sheet because they are unlikely to be repaid.
Roughly one third of all the loans outstanding at the bank were noncurrent.
This is exactly the kind of bank that regulators are most worried about: small banks with lots of exposure to the troubled real estate market.
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