April 25, 2009

Regulators close 26th U.S. bank

A Georgia bank shut down by regulators became the 10th in the state and the 26th in the United States to fail this year, officials said.

American Southern Bank of Kennesaw, Ga., was closed by Federal Deposit Insurance Corp. officials Friday in what FDIC spokesman David Barr told the Atlanta Journal-Constitution was a typical Georgia bank failure triggered by big home-building loans that went into default with the crash of the real estate market.

The Bank of North Georgia assumed most of American Southern's operations and was set to reopen its single office Monday, the newspaper said.

American Southern held $104 million in deposits at the end of March, with nearly half made up of brokered deposits that regulators say are considered a volatile and risky form of funding.