By Truman Lewis
ConsumerAffairs.com
September 27, 2009
Federal regulators seized Georgian Bank, the second-largest bank in Atlanta, bringing the total number of bank failures this year to 95. The failure is expected to cost the Federal Deposit Insurance Corporation (FDIC) deposit-insurance fund close to $1 billion.
First Citizens Bank and Trust Company, Inc., Columbia, S.C., will assume all of the deposits of Georgian Bank.
The five branches of Georgian Bank will reopen on Monday as branches of First Citizens Bank. Depositors of Georgian Bank will automatically become depositors of First Citizens 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 should continue to use their existing branches until First Citizens Bank can fully integrate the deposit records of Georgian Bank.
Over the weekend, depositors of Georgian Bank 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.
In August, the FDIC had expressed concern about the bank's practices and said "had reason to believe that the bank had engaged in unsafe or unsound business practices and had committed violations of law and/or regulations," The Wall Street Journal reported.
As of July 24, 2009, Georgian Bank had total assets of $2 billion and total deposits of approximately $2 billion. In addition to assuming all of the deposits of the failed bank, First Citizens Bank agreed to purchase essentially all of the assets.
The FDIC and First Citizens Bank entered into a loss-share transaction on approximately $2 billion of Georgian Bank's assets. First Citizens Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-sharing arrangement is projected to maximize returns on the assets covered by keeping them in the private sector.
Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-405-1498. The phone number will be operational this evening until 9:00 p.m., Eastern Daylight Time (EDT); on Saturday from 9:00 a.m. to 6:00 p.m., EDT; on Sunday from noon to 6:00 p.m., EDT; and thereafter from 8:00 a.m. to 8:00 p.m., EDT. Interested parties can also visit the FDIC's Web site.
