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FDIC takes over Freedom Bank of Commerce
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A Commerce-based bank was seized Friday by the Georgia Department of Banking and Finance and the Federal Deposit Insurance Corp.

Freedom Bank, which has offices in Commerce, Winder, Jefferson and Homer, was closed at the end of business on Friday.

The FDIC has entered into an agreement with Northeast Georgia Bank of Lavonia to assume all of the deposits of Freedom Bank. The four offices of Freedom Bank will reopen Monday as branches of Northeast Georgia Bank.

As of Wednesday, Freedom had total assets of approximately $173 million and total deposits of $161 million. In addition to assuming all of the deposits of the failed bank, Northeast Georgia Bank agreed to purchase approximately $167 million in assets at a discount of $13.65 million. The FDIC will retain the remaining assets for later disposition.

The bank was given a cease-and-desist order last year by state regulators. It had reported at that time that 12 percent of its loan portfolio was in default.

Freedom Bank of Georgia is the 17th FDIC-insured institution to fail in the nation and the second in Georgia this year. The last bank to fail in Georgia was FirstBank Financial Services of McDonough on Feb. 6.

Depositors of Freedom Bank of Georgia will automatically become depositors of Northeast Georgia Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage.

Customers of both banks should continue to use their existing branches until Northeast Georgia Bank can fully integrate the deposit records of Freedom Bank of Georgia.

Northeast Georgia Bank already has Jackson County offices in Braselton, Commerce and Jefferson. It has been in existence since 1906.

Over the weekend, depositors of Freedom Bank of Georgia can access their money by writing checks or using ATM or debit cards.

Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

The FDIC and Northeast Georgia Bank entered into a loss-share transaction. Northeast Georgia Bank will share in any losses on approximately $96.5 million in assets covered under the agreement. The loss-sharing arrangement is projected to maximize returns on the covered assets covered by keeping them in the private sector. The agreement is expected to minimize disruptions for loan customers as they will maintain a banking relationship.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $36.2 million. Northeast Georgia Bank’s acquisition of all the deposits was the “least costly” resolution for the FDIC’s Deposit Insurance Fund compared to alternatives.

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