|Georgia banking regulators seized a small institution today. Regions Bank has agreed to assume the deposits of the failed bank and acquire a small portion of its assets.
The Georgia Department of Banking and Finance shut down FirstBank Financial Services today, a press release this afternoon said. The Federal Deposit Insurance Corporation has been appointed receiver by the Superior Court of Henry County.
The state took possession pursuant to the Official Code of Georgia, Section 7-1-150(a), authorizing the regulator to take possession of any state chartered financial institution if it "is either insolvent or operating in an unsafe or unsound condition to transact its business, is operating in violation of any court order, statute, rule or regulation, or requests the department to take possession of its business and property," Georgia's banking department said in a statement.
The FDIC issued a cease-and-desist order against FirstBank in October. Around that same time, FirstBank entered an agreement with the Federal Reserve Bank of Atlanta and the Banking Commissioner of the State of Georgia requiring it to conserve capital, comply with regulatory requirements and maintain ongoing reporting of its activity.
All of FirstBank's 6,400 deposit accounts for $279 million as of Dec. 31 will be assumed by Birmingham, Ala.-based Regions. Around $17 million of FirstBank's $337 million in assets will be purchased by Regions.
FirstBank reported $141 million in construction and land development loans as of Sept. 30, 2008, while commercial mortgage holdings were $33 million and residential loans owned were $32 million.
The four offices of FirstBank, based in McDonough, Ga., will reopen as Regions on Monday. Headcount at the failed institution was 57 as of Sept. 30, 2008.
Regions said this is its second acquisition of a failed FDIC-insured bank in five months. In August, Regions paid a 1.012 percent premium to acquire $1.0 billion in deposits of Alpharetta, Ga.-based Integrity Bank.
FirstBank, the seventh FDIC-insured bank to fail this year, will cost the Deposit Insurance Fund an estimated $111 million.