Published Friday, March 08, 2013
WASHINGTON (AP) – Regulators have closed a small bank in Georgia, bringing the total number of U.S. bank closures to four for this year after 51 closures in 2012.
The Federal Deposit Insurance Corp. said that state regulators closed Frontier Bank of LaGrange, Ga., on Friday. It has nine branches in Georgia and Alabama, and about $258.8 million in assets and $224.1 million in deposits.
HeritageBank of the South has agreed to assume all of the deposits of Frontier Bank and purchase essentially all its assets. HeritageBank of the South is a unit of Heritage Financial Group Inc. based in Albany, Ga.
Frontier's closure is the first bank failure in the state of Georgia this year.
U.S. bank closures have been declining since they peaked in 2010 in the wake of the financial crisis and the Great Recession. In 2007, just three banks went under. That number jumped to 25 in 2008, after the financial meltdown. It ballooned to 140 in 2009 and regulators seized 157 banks in 2010. The pace declined to 92 in 2011 and 51 last year.
The sharply reduced pace of closings shows sustained improvement. An average of only four or five banks close annually in a strong economy
The FDIC said it estimates Frontier Bank's closure will cost the deposit insurance fund $21.8 million.
Bank failures cost the deposit insurance fund an estimated $88 billion from 2008 through 2011. The FDIC expects bank failures from 2012 through 2016 to cost $10 billion.
For more information, visit the FDIC's website at:
© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.