A metro Atlanta bank on Friday became the second in Georgia to fail this year.
Douglas County Bank, in Douglasville, was seized and sold to Hamilton State Bank, of Hoschton. The bank has four area branches, in Douglasville, Dallas and Lithia Springs.
It was Douglas County’s largest bank, with 22 percent of the market share by deposits.
Branches will reopen as branches of Hamilton State Bank at 9 a.m. Saturday.
In February 2009, Douglas County Bank president and CEO Billy Mayhew told The Atlanta Journal-Constitution the bank was well-capitalized, but struggling with losses from real estate, as has been the case for many Georgia banks.
“We just have a lot of real estate loans that have fallen in value, ” he said at the time. “But we feel very confident that we will get through this downturn.”
The bank was founded in 1974 by the Thornton family. Key shareholders included John Thornton, namesake of John Thornton Chevrolet.
Lee Bradley, senior managing director of Community Capital Advisors, said the bank was well-respected in the community, but the hole they had fallen into was too deep.
“They were a fine bank for a long time,” he said. “Like everybody else, real estate was the virus that got them.”
Douglas County Bank is the 86th bank failure in the state since mid-2008. That is more than in any other state over that period.
The year’s previous failure was that of Frontier Bank in LaGrange, which was closed in March. That bank had most of its branches in Alabama.
Georgia’s banking industry has been improving, and the number of failures has decreased, after several years of trouble.
The FDIC said Hamilton State Bank agreed to acquire $314.3 million in deposits and $260.9 million of the bank’s assets. Hamilton State Bank entered into a loss-share agreement with the FDIC for $159.2 million in assets.
As of Dec. 31, Douglas County Bank had $316.5 million in assets. The failure will cost the FDIC’s Deposit Insurance Fund an estimated $86.4 million.
About the Author
