RockBridge Commercial Bank closed by regulators

State regulators shut down RockBridge Commercial Bank Friday, three years after it was founded with a record amount of capital for a start-up bank in Georgia.

RockBridge becomes the 25th lending institution in the state  to close its doors in the wake of the financial crisis.

But unlike many other shuttered banks, RockBridge is not being acquired. The Federal Deposit Insurance Corporation, which was appointed receiver and tried to find another institution to take over RockBridge's operations, could not.

"The FDIC was unable to find another financial institution to take over the banking operations of RockBridge Commercial Bank," the FDIC said in a statement.

The agency said checks will be mailed Monday to retail depositors for their insured funds.

RockBridge reported having $294 million in total assets and $291.7 million in deposits at the end of September.

Customers with brokered deposits will have those funds wired back to their brokers when they give the FDIC the needed paperwork to show the accounts don't exceed insurance limits.

Kathryn L. Knudson, an attorney at Bryan Cave, the law firm representing RockBridge, declined comment Friday but provided a portion of a statement that RockBridge's board of directors sent to its shareholders:

"It has not been a secret that all banks in our area have been affected by what is generally described as the worst economic downturn since in America since the Great Depression," the statement said. "When economic growth in Atlanta abruptly stopped and became a contracting environment, too many of our customers found themselves unable to meet the interes and prinicpal obligations on their loans and alternative sources of collateral proved insufficient to make up the shortfall. . . .

"Ultimately, these losses used up so much of our capital, that we fell below regulatory threshholds and were no longer permitted by regulators to operate independently."

The bank opened in Sandy Springs after raising $36 million -- a then-record for a Georgia start-up bank -- from investors including some of metro Atlanta's top business leaders, including Home Depot co-founder Bernie Marcus and Charles Ackerman, founder of commercial real estate firm Ackerman & Co.

As the economy soured, so did RockBridge's portfolio, which, like many troubled institutions, was heavily tied to real estate development.

As it sought regulatory approval and wooed investors, RockBridge officials had said they planned to focus on lending to small and medium sized companies. But the bank focused real estate-related lending, which was booming at the time.

Real estate loans account for 72 percent of RockBridge's $211.7 million portfolio, regulatory filings show, compared with 20 percent in commercial loans to businesses.

More than one-third of RockBridge's real estate loans are in the deepest stages of delinquency.

In an earlier interview with The Atlanta Journal-Constitution, RockBridge's former chief financial officer, Rollo Ingram, said he warned top management they were taking on too much risk by concentrating on on real estate.

"I commented to the board on a number of occasions of the danger," Ingram said in that interview, "but nobody seemed to listen."