The Atlanta Journal-Constitution has followed the crash of the banking industry through the Great Recession closer than any other media. Read more Sunday about the status of the banking industry in Georgia in the Business section of the AJC and at myajc.com
Conyers-based Eastside Commercial Bank was closed Friday by bank regulators, becoming the first Georgia bank to fail in more than a year.
The small bank, which has two branches in Rockdale and Gwinnett counties, had long been on regulators’ watch list of troubled banks.
The bank’s deposits and branches were acquired by Atlanta-based Community and Southern Bank, while Macon-based State Bank and Trust Co. bought part of the institution’s loans, said the Federal Deposit Insurance Corp.
Eastside’s two branches in Conyers and Duluth will reopen as Community and Southern Bank branches, the FDIC said. The FDIC guarantees bank deposits up to $250,000.
The failure occurred even as Georgia banks show growing signs of recovery, with rising profits and a lengthening list of recent mergers among healthy banks.
Georgia Bankers Association President Joe Brannen said 86 percent of the state’s 200-plus banks are profitable and report rising deposits and loan volumes.
“Unfortunately, the effects of the severe financial downturn have had a long reach. It’s just further evidence of the severity of the recession and how hard it has been for everyone to recover,” Brannen said of Eastside’s failure.
Still, “the banking industry and the economy in Georgia are much stronger than just a couple of years ago,” he said.
Founded in 2005, Eastside was among many launched in Georgia during the real estate boom, only to struggle when developers and other businesses were unable to re-pay loans. In 2009, regulators had ordered Eastside to to shore up its finances, improve management and cease “unsafe or unsound banking practices.”
At the end of March, the bank had $169 million in assets and $161.56 million in deposits, according to the Federal Deposit Insurance Corp.
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