25th Georgia bank fails

By Paul Donsky

The Atlanta Journal-Constitution

American United Bank , a tiny, one-branch bank based in Lawrenceville, failed on Friday amid large real estate losses as the state's banking crisis marches on.

Regulators shut down the bank, whose operations were taken over by another Georgia institution, Ameris Bank of Moultrie.

American United is the 25th Georgia bank to fail since August 2008, the most in any state during that stretch. The bank was closed on a day that saw the number of failures nationwide top 100 this year.

American United opened in 2004 and ramped up real estate lending. Through the first half of the year, the bank lost $3.8 million and had $8.7 million in noncurrent loans -- 10 percent of its total loan portfolio.

The bank became significantly undercapitalized, with capital levels far below regulatory requirements.

American United was founded by Lilburn businessman P.I. Joy, an Indian-American, with an eye to serving the needs of immigrants living in the area.

Joy told the Journal-Constitution in 2005 that when the investment group was forming the bank, the Sept. 11, 2001 terrorist attacks and the nation's response were fresh in their minds. The bank adopted a patriotic theme, even building its lone branch as a replica of the White House.

Ameris took over American United's $101 million in deposits and essentially all of the bank's $111 million in assets, according to the Federal Deposit Insurance Corp. The FDIC and Ameris entered into a loss-sharing arrangement that minimizes exposure to the Moultrie lender, the fourth-larges bank based in Georgia.

The FDIC said the failure will cost its insurance fund $44 million.