Three more Georgia banks fail

Buckhead Community Bank, founded by Atlanta business royalty to cater to a wealthy clientele, is the latest victim of the state's banking crisis.

It is one of three deeply troubled Georgia banks that failed on Friday, bringing the total number shut down since 2008 to 29, more than in any other state.

The other banks shut down Friday are First Security National Bank, of Norcross, and Tattnall Bank, of Reidsville in south Georgia, two of the state’s smaller lenders. All three banks were acquired by new owners.

Buckhead Community, launched in 1998 by Charlie Loudermilk, founder of rent-to-own giant Aaron’s Inc., grew quickly during the real estate boom earlier this decade but, in a now-familiar story, sustained huge losses once the housing market collapsed.

Buckhead lost $60 million this year alone, ending the third quarter with just $8.6 million left in capital and nearly $150 million in severely troubled loans on its books. Buckhead’s leaders scrambled to raise capital in recent months but were unable to save the bank.

Both Buckhead Community and First Security were acquired by State Bank & Trust, a Macon-based lender. Buckhead’s six branches and First Security’s four branches will reopen as branches of State Bank.

Until recently State Bank was one of the state’s smallest lenders. But last summer, the bank was acquired by an investment team led by veteran Georgia banker Joe Evans, who raised nearly $300 million to take over Security Bank of Macon, which failed in July.

Evans said then that he planned to use the $300 million war chest in part to acquire failed banks, and on Friday he lived up to his word. With the acquisitions, State Bank becomes Georgia’s fourth-largest bank, with more than $2.8 billion in assets.

In an interview Friday, Evans, State Bank’s chairman and CEO, said his strategy has been to have a presence in both Macon and metro Atlanta.

The acquisitions give State Bank branches across Atlanta’s wealthy northern suburbs, including Cobb, Gwinnett, north Fulton and Forsyth counties. Evans said the FDIC has given the bank 90 days to determine which of the failed bank branches will remain open.

Evans said State Bank is building “what we believe will be a substantial community banking presence on a very strong capital base.”

The day's prize for State Bank, though, is Buckhead Community. The bank has a large base of about 16,000 depositors, some of whom are very wealthy.

In July, Loudermilk told the AJC he started the bank after trying to cash a check at his bank -- one of the "big banks," he said -- only to have to talk to three people before getting his money. He became emotional when talking about the bank's troubles.

"I'm very saddened by it," he said. "I'm a big guy. I know you win some, you lose some. If we had done anything improper, I would be very upset with myself and everybody invovled. But if a recession is a cause of our problems, there's nothing I can do about it. It's beyond my control."

State Bank entered into a loss-sharing arrangement with the Federal Deposit Insurance Corp. on both of its acquistions, which will protect the bank from any potential losses.

The FDIC estimates the failure of Buckhead Community will cost $241 million, while the failure of First National is projected to cost $30 million.

Tattnall Bank was acquired by HeritageBank of the South, based in Albany.