Frontier Bank, La Grange, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the FDIC as receiver. The FDIC sold the failed bank to HeritageBank of the South, Albany, Georgia. HeritageBank will assume all deposits of Frontier.
Frontier Bank was established in 1946 and originally named Valley National Bank of Lanett. At the time of its closing, Frontier Bank had nine branches. All depositors of Frontier Bank will automatically become depositors of HeritageBank with uninterrupted FDIC deposit insurance coverage up to the applicable limits. Frontier Bank customers will have full access to their money over the weekend through the use of debit cards, checks and ATMs.
Frontier Bank becomes the fourth and largest bank failure of the year. At December 31, 2012, Frontier Bank had total assets of $258.8 million and total deposits of $224.1 million. The three banks closed this year prior to today had total deposits of $206.3 million. The four banks that have been closed during 2013 had total assets of $465.1 million and resulted in combined losses to the FDIC Deposit Insurance Fund of $104.2 million.
The number of failed banks during 2013 has dramatically declined compared to last year. At this time last year, a total of 13 banks had failed with total assets of $3.8 billion and losses to the FDIC of $1.0 billion. Bank failures reach a high of 157 during 2010 and have declined every year since then. Including today’s bank failure, a total of 469 banks have failed in the United States since 2008.
In addition to assuming all assets, HeritageBank agreed to purchase all of Frontier Bank’s assets. Including today’s purchase of Frontier Bank, HeritageBank has acquired a total of four failed banks since December 2009.
Frontier Bank becomes the fourth bank failure of 2013 and the first in Georgia. The cost to the FDIC DIF for the failure of Frontier Bank was $51.6 million.