Federal regulators have closed a small bank in Georgia, bringing the number of U.S. banks that have failed so far this year to 32. The Federal Deposit Insurance Corp. said Friday that it seized Montgomery Bank & Trust, based in Ailey.
Federal bank regulators have sued 12 former directors and officers of a failed Georgia bank that collapsed less than six years after it was formed. The Federal Deposit Insurance Corporation accuses the operators of Freedom Bank of Georgia in Commerce in a lawsuit filed Monday of aggressive lending practices that focused too much on high-risk loans.
Federal banking regulators want former officials of Atlanta-based Silverton Bank to pay $71 million in damages following Georgia's largest bank failure. Silverton went belly up two years ago. Now, the Federal Deposit Insurance Corporation alleges, former bank officials followed lax lending policies and bought lavish airplanes and posh buildings while their bank verged on collapse.
On Friday, Georgia suffered its 17th bank failure this year. Federal regulators shut-down Statesboro-based First Southern National Bank. It was sold to Albany-based Heritage Bank of the South. Georgia leads the nation with 68 bank failures since the middle of 2008.
The proliferation of bank failures in Georgia has drawn the attention of Congress. The House Financial Services Committee's Subcommittee on Financial Institutions and Consumer Credit will host a hearing in Newnan on Aug. 16. U.S. Rep. Lynn Westmoreland says the hearing will focus on the impact regulations may be having on community banks.
Another two Georgia banks were seized into last weekend by regulators, including one of northeast Georgia’s oldest financial institutions. Habersham Bank and Citizens Bank of Effingham were both closed.