When a group of business executives gathered in mid-2007 to discuss forming a new bank in Gainesville, they set their sights on chipping away at the market share of Gainesville Bank & Trust, the largest local bank.

What a difference a year makes.

By the time Chattahoochee Bank of Georgia opened its doors on Sept. 16, Gainesville Bank & Trust was no more, having merged with Atlanta-based SunTrust.

At the same time, the banking industry was facing the crisis that would culminate in the passage of a $700 billion federal bailout.

"As we started moving through the (federal) approval process in the spring, the first problems started surfacing at other banks and the FDIC slowed everyone's application down," said Jody Lail, president and chief executive of Chattahoochee Bank.

"Then, the stock market started dropping and we started trying to sell our stock. What we expected would be a 45-day process to raise $20 million turned into 90 days."

By the time they moved into their two-story main office, another likely competitor, Wachovia, was in a merger with Wells Fargo.

"The two banks we expected to be competing against primarily were either merging or had been merged," Lail said.

"We have just seen our opportunities increase dramatically from those two banks we thought would be our fiercest competitors."

The merger of GB&T and SunTrust created an opportunity for Chattahoochee to bring in experienced local bankers.

"The Gainesville Bank & Trust acquisition by SunTrust was a net loss to the community because they were involved in so many activities and causes," Lail said.

"But we were happy to have the opportunity to hire lots of good people from Gainesville Bank & Trust that we would not have had otherwise."

While existing banks were dealing with troubled loans, Lail said his bank has untouched capital.

"It's a good time to have $20 million in capital that is not tied up in land loans, development loans or residential construction loans," he said. "We have a clean balance sheet and we're just beginning to grow loans and grow deposits. So, we're probably in the best shape of any bank in the state.

"That wasn't our plan, it was just fortunate timing."

Lail said the bank has benefited from account insurance increases from the Federal Deposit Insurance Corp.

The bank opted to participate in the higher insurance program for the largest business deposits. He said there is an effort to assure new customers of the bank's solid position, despite being newly opened.

Lail said having a board of directors made up of business and civic leaders in Hall County has also been a benefit.

"We hope we can convince the Gainesville market to bring their banking back to Gainesville," he said.

"Folks who once banked in Charlotte are about to be moved to San Francisco and people who banked at Gainesville Bank & Trust are now banking in Atlanta and up and down the Atlantic seaboard."

Lail said there is a definite place for well-run community banks.

"Most community banks didn't create this problem and most community banks did not make sub-prime loans," he said.

"We like to lend locally because we can drive by the property we lend on or visit the businesses we lend to."