WASHINGTON — Regulators shut Freedom Bank of Georgia late Friday in the government's 17th takeover of the year.
The $173 million-asset bank in Commerce became Georgia's seventh failed bank since the start of 2008, as the state continues to get hit hard by the housing decline.
The Federal Deposit Insurance Corp. said Northeast Georgia Bank in Lavonia will assume all $161 million of the failed bank's deposits and buy 96% of its assets at a $13.6 million discount. The FDIC and Northeast Georgia will share in losses on $96.5 million of assets under the agreement, the agency said.
The failure marked the eighth straight Friday that regulators have announced a bank shutdown, and just last week the FDIC reported the Deposit Insurance Fund in the fourth quarter had fallen 45% and held enough reserves to cover just 0.4% of insured deposits.
The agency is said to be considering a 10-basis point special premium to help rebuild the fund, a much lower figure from the special rate of 20 basis points the agency announced Feb. 27. FDIC Chairman Sheila Bair has expressed willingness to lower the rate since lawmakers may raise the agency's line of credit from the Treasury Department to $100 billion, from $30 billion.
The FDIC estimated the failure of Freedom Bank of Georgia will cost the DIF $36.2 million.