WASHINGTON — Regulators closed $354.1 million-asset Alpha Bank and Trust in Alpharetta, Ga., Friday, the 16th bank to fail this year.

The two-year-old, state-chartered bank was the third institution in Alpharetta to fail in a little more than a year. Integrity Bank failed in August with just over $1 billion of assets, and NetBank, a $2.5 billion-asset thrift, failed in September 2007.

The Federal Deposit Insurance Corp. said the $1 billion-asset Stearns Bank, a St. Cloud, Minn., unit of Stearns Financial Services Inc., will take over Alpha Bank's insured deposits. The agency said the resolution would cost the Deposit Insurance Fund an estimated $158.1 million.

Alpha's two branches will reopen on Monday as branches of Stearns. The Minnesota bank did not pay a premium to assume Alpha's deposits and $38.9 million of its assets, the FDIC said.

The FDIC said Alpha's insured deposits totaled $343.1 million, about 99% of its deposit base. The bank held $16.8 million in brokered deposits; the FDIC will pay depositors the insured portion of that directly.

The failure is the first since the FDIC expanded deposit insurance coverage to $250,000 per account because of the financial crisis.

It was the third bank failure in two weeks. On Oct. 10 regulators closed the $98 million-asset Main Street Bank in Northville, Mich., and the $39 million-asset Meridian Bank in Eldred, Ill.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.