The First National Bank of Barnesville, Georgia, Closed By Regulators

October 22, 2010 – The First National Bank of Barnesville, Barnesville, Georgia, was closed today by the Office of the Comptroller of the Currency, which appointed the FDIC as receiver.  The FDIC sold First National to United Bank, Zebulon, Georgia, which will assume all deposits and purchase essentially all of the assets of the failed bank.

The First National Bank of Barnesville was a community bank with two branches that had been in business for over 100 years.  The Bank’s website notes that it has been serving the local community since 1902.

The First National Bank of Barnesville has been meeting customers’ financial needs since it was nationally chartered in 1902.  The employees of First National bring many years of dedicated service, banking knowledge and experience to our institution.  In the rapidly changing world of today, we have managed to maintain a small business atmosphere that is so important in community banking.  And we’ve accomplished this while experiencing remarkable growth posting assets at $125 million as of 1st quarter, 2007.


The First National Bank of Barnesville

The First National Bank of Barnesville had been under OCC regulatory orders to increase capital since June 2009 but was unable to increase capital ratios to a level considered safe by regulators. The Bank was cited for having lax underwriting standards in construction loans and an over concentration of commercial real estate loans, among other things.

First National customers will have access to their money over the weekend and will automatically become depositors of United Bank with no interruption in FDIC insurance coverage.

The First National Bank had total assets of $131.4 million and total deposits of $127.1 million at June 30, 2010.  United Bank did not pay the FDIC a premium for the deposits of First National.

Although United Bank agreed to purchase all assets of failed First National Bank, the FDIC and United Bank entered into a loss-share transaction covering $107.3 million of the assets acquired by United Bank.  The FDIC states that by keeping assets in the private sector, ultimate losses on the loan portfolio are minimized.

United Bank, is owned by parent company United Bank Corporation, which received $14.4 million in TARP money from the US Treasury in May 2009, of which $12.9 million remains unpaid.  Despite this, United Bank has made two previous acquisitions of failed banks.  First National is the third financial institution acquired by United Bank  from the FDIC in the last two years.  The two previous purchases were of First Georgia Community Bank in Jackson in 2008 and First Coweta Bank in Newnan in 2009.

United Bank was originally founded in 1905 as the Bank of Zebulon.  Almost 90% of United Bank is owned by its employees, directors and their families, according to the Bank’s website.

The First National Bank of Barnesville is the 136th banking failure of the year and the 16th in Georgia.  The cost to the FDIC Deposit Insurance Fund for closing First National is estimated at $33.9 million or 25% of the bank’s total assets.

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