Ninth Georgia bank collapses

Omni National Bank in Atlanta, reeling from bad real estate bets, was shut down by federal regulators Friday, becoming the ninth Georgia bank to fail in the past year.

Omni, one of the state’s largest community banks with $956 million in assets, posted a $14.5 million loss last year. Moreover, the bank was saddled with $114 million in nonperforming loans at the end of the fourth quarter.

Omni’s regulator, the Office of the Comptroller of the Currency, said in a news release the bank had experienced substantial losses because of “unsafe and unsound practices” that depleted most of its capital.

“There is no reasonable prospect the bank will become adequately capitalized without federal assistance,” the OCC said.

Omni is the third bank chartered in Georgia to fail this month and the fourth this year as the state’s banks continue to struggle with bad loans tied to the depressed real estate market. Since the start of 2008, Georgia leads the nation with nine failures, followed by California with eight.

Atlanta-based SunTrust Banks entered into an agreement with the Federal Deposit Insurance Corp. to help wind down Omni’s operations.

SunTrust will run Omni’s six branches in Atlanta, Dalton, Tampa, Chicago, Dallas and Houston until April 27, giving time for customers in Georgia and Florida to decide whether to open an account with SunTrust or have their money mailed back to them. Omni customers in Texas and Illinois, states in which SunTrust does not operate, must find a new banker.

The FDIC said the failure is expected to cost $290 million, more than any of the 20 other banks that have failed nationwide this year.

The FDIC insures accounts of up to $250,000. At the time of closing, Omni held about $2 million in uninsured deposits. Customers with accounts over $250,000 are asked to call the FDIC at 1-800-830-3256.

MOUNTING FAILURES

Nine Georgia banks have failed in the last seven months

Bank; date failed; assets

Omni National Bank (Atlanta): March 27; $956 million

FirstCityBank (Stockbridge); March 20; $297 million

Freedom Bank of Georgia (Commerce); March 6; $173 million

FirstBank Financial Services (McDonough); Feb. 6; $337 million

Haven Trust Bank (Duluth); Dec. 12; $572 million

First Georgia Community Bank (Jackson); Dec. 5; $237.5 million

The Community Bank (Loganville); Nov. 21; $681 million

Alpha Bank (Alpharetta): Oct. 24; $354.1 million

Integrity Bank (Alpharetta); Aug. 29; $1.1 billion

Source: FDIC