Four Georgia banks fall under FDIC scrutiny

Four Georgia banks were recently placed under increased scrutiny by federal regulators, including one distressed institution that was told to raise investor cash or find a buyer.

Valdosta-based Sunrise Bank, with offices in Atlanta and near Macon, is now under a prompt corrective action order, a serious regulatory rebuke from the Federal Deposit Insurance Corp.

Sunrise, deemed by regulators as “significantly undercapitalized,” has been ordered to raise new investor funds, “accept an offer to be acquired” or merge with another bank. The order was signed Jan. 23 but made public Friday.

Regulatory actions aimed at improving bank operations have become common in Georgia, a state that leads the nation in bank failures since August 2008.

Sunrise has been troubled for some time and has taken a number of steps to try to satisfy regulators over the past few years.

In summer 2010, the former Sunrise Bank of Atlanta merged with related banks in Jeffersonville and Valdosta in a bid to shore up their collective balance sheets. Capitol Bancorp, a Michigan bank holding company that held interests in the three banks, was ordered to sell its investments.

Richard Cathy, acting president and chief executive of Sunrise, said the bank has been working with Capitol Bancorp to boost core funding through the sale of stock, the sale of assets or through finding a merger partner.

While acknowledging difficult market conditions, Cathy said, “We are very optimistic that we are going to able to raise investor capital.”

Four other Capitol Bancorp-related institutions across the U.S. also received prompt corrective action orders in January.

Separately, three other Georgia banks -- Rabun County Bank in Clayton, Forsyth-based The Farmers Bank and Statesboro-based Farmers & Merchants Bank -- agreed to “consent orders.”

These consent orders generally require the banks to improve internal controls and raise investor cash.

The banks each agreed to the orders without admitting or denying violations of banking regulations.