Seventh Georgia Bank Fails - FirstBank Financial Services Seized By FDIC, Taken Over By Regions Bank
McDonough-based FirstBank Financial Services was seized by the Federal Deposit Insurance Corp. today, and the bank was taken over by Regions Bank.
From the Atlanta Business Chronicle:
Walt Moeling, Bryan Cave Powell Goldstein LLP banking attorney and counsel for the bank, said the failure was due to a combination of market forces and over-concentration in residential real estate lending.
"This is a case of the economy overwhelming the bank," Moeling said.
The slowdown in residential construction, particularly for FirstBank's Henry County and south metro business area, has been acute and reflected in a souring balance sheet for the bank throughout 2008....
The bank owned $105 million in problem construction and development loans, as of fourth quarter 2008...
The move also marks the second local purchase by Regions Financial, which added five branches in north metro Atlanta through the buyout of seized, Alpharetta, Ga.-based Integrity Bank in August 2008.
Even though the federal government has been throwing money up in the air and hoping it lands in the right place it has resisted for the most part pressures to nationalize banks. Given the level of competency of the government, it is good that at least they realize that the private sector is better equipped to run banks. As a bankruptcy attorney though I have plenty of concerns about the failure of our financial institutions, we would be far worse off if the government was in control.