Saturday, March 7, 2009

U.S. regulators close Freedom Bank of Georgia

U.S. regulators closed Freedom Bank of Georgia bank on Friday, the 17th U.S. bank to fail this year as the struggling economy and falling home prices take their toll on financial institutions.

The Federal Deposit Insurance Corp said Freedom Bank of Georgia had $173 million in assets and $161 million in deposits. The failure is expected to cost the FDIC deposit insurance fund an estimated $36.2 million.

Northeast Georgia Bank agreed to assume the deposits of Freedom Bank of Georgia, whose four branches will reopen on Monday as branches of Northeast Georgia Bank.

Customers can access their money over the weekend by check, teller machine or debit card, the FDIC said.

In 2008, 25 U.S. banks were seized by officials, up from only 3 in 2007.

The biggest U.S. bank failure ever occurred in September with the demise of Seattle-based Washington Mutual. The bank, which closed in September while suffering from losses from soured mortgages and liquidity problems, had $307 billion in assets.