|A Georgia bank seized by federal regulators today is expected to cost the government nearly $300 million. No buyer was found and the bank will be liquidated -- impacting nearly 150 employees. The pace of mortgage-related failures so far this year indicates 2009 may be record.
The Office of the Comptroller of the Currency announced today the seizure of Omni National Bank. The Federal Deposit Insurance Corporation was appointed receiver.
The Atlanta-based bank had 144 employees and six full-service branches in six states. It was founded in 2000.
"The OCC acted after finding that the bank had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices," the statement said. "The OCC also found that the bank has incurred losses that have depleted most of its capital, and there is no reasonable prospect that the bank will become adequately capitalized without Federal assistance."
The OCC issued a cease-and-desist order against Omni late last year.
Former cross-town rival SunTrust Bank has agreed to act as paying agent for the insured deposits of Omni and operate the branches on behalf of the FDIC until April 27 -- at which point depositors will be given the option of moving their accounts to SunTrust or receiving checks from the FDIC. Illinois and Texas depositors will have a check mailed from SunTrust.
The FDIC said it did the deal with SunTrust to avoid the inconvenience and disruption of customers receiving checks for their insured deposits. The arrangement also allows for uninterrupted automated deposits while customers, "particularly in Chicago, Dallas and Houston," have time to find another institution.
Omni had $956 million in assets as of March 9, including $81 million in residential mortgages, $173 million in commercial mortgages and $175 million in construction-and-land-development loans as of Dec. 31, 2008. Deposits stood at $797 million, including $2 million in uninsured deposits, as of March 9.
The FDIC expects to lose $290 million on the failure of Omni -- the 21st FDIC-insured institution to be seized this year.
MortgageDaily.com has tracked the failure or closing of 50 mortgage-related firms so far this year, putting 2009 on pace to see 200 failures. The highest year on record was 2007, when 160 mortgage-related companies closed.