A small Georgia bank failed on Friday, the first in nearly four months for a state whose banking industry has been improving after several years of misery.
LaGrange-based Frontier Bank, which has most of its branches in Alabama, was seized and sold to Albany-based HeritageBank of the South.
Frontier’s nine branches will reopen during normal business hours beginning Saturday under their new flag, according to the Federal Deposit Insurance Corp.
Frontier was founded as Valley National Bank of Lanett, Ala., in 1946. The bank had a series of name changes and a merger. Its headquarters moved to LaGrange, 70 miles southwest of Atlanta, in 2002.
Eighty-five banks based in Georgia have now failed since mid-2008, more than in any other state in that time. But Frontier is the first failure in Georgia since Nov. 16.
Georgia banks are getting healthier, as the amount of soured loans and foreclosed real estate wanes and lenders re-establish an ability to make money again.
The FDIC said HeritageBank agreed to acquire all of Frontier’s $224.1 million in deposits and the bulk of its $258.8 million in assets. The cost of the failure to the FDIC’s Deposit Insurance Fund, the backstop protecting consumers, is estimated at $51.6 million.
Like most of the other failed Georgia banks, Frontier was heavily weighted toward construction and development loans as well as commercial real estate.