FDIC-insured McDonough bank fails

Former customers of the Enterprise Banking Company are looking for other financial institutions with which to bank, following the closing of the McDonough-based bank.

The bank was seized, on Friday, Jan. 21, the Georgia Department of Banking and Finance. Federal officials said the bank is the fourth Federal Deposit Insurance Corporation- insured institution to fail in the nation this year, and the second in Georgia. The Oglethorpe Bank in Brunswick, Ga., closed on Jan. 14.

Officials with the Georgia Department of Banking and Finance noted that the McDonough bank seizure was pursuant to the Official Code of Georgia, Section 7-1-150(a).

The state code gives the department authorization to take possession of a state-chartered institution "whenever such financial institution is either insolvent, or operating in an unsafe, or unsound, condition to transact its business, is operating in violation of any court order, statute, rule or regulation, or requests the Department to take possession of its business and property."

Enterprise Banking Company had been asked to take some corrective measures late in 2009. The FDIC, which was appointed receiver in the seizure process, issued a consent order against the bank on Dec. 21, 2009, according to Greg Hernandez, spokesman in the FDIC Office of Public Affairs.

"A consent order is an agreement between the regulator and the bank to take corrective actions that are specified in the order," explained Hernandez. "It could deal with management, unsound and unsafe banking practices, etc."

The order prescribed corrective actions for the bank to take as well as deadlines to have those corrective actions completed, he added. Among the stipulations was providing a written management plan for having and retaining qualified management.

Hernandez said Enterprise Banking Company closed permanently on Friday, Jan. 21. He said in a news release that the FDIC created the Deposit Insurance National Bank of McDonough (DINB) to protect depositors of the now-dissolved bank.

The FDIC spokesman said the DINB will remain open until Friday, Jan. 28, to allow depositors access to their insured deposits, and time to open accounts at other insured institutions. As receiver, the FDIC has transferred all insured deposits of Enterprise Banking Company, and all secured deposits of public entities, to the DINB, with the exception of brokered deposits, certificates of deposit (CDs) and individual retirement accounts (IRAs).

The FDIC will mail checks directly to customers with CDs and IRAs, said Hernandez. For the brokered deposit customers, the FDIC will pay the brokers directly for the amount of their insured funds. He said customers with brokered deposits should contact their brokers directly for information concerning their money.

The bank's main office in McDonough re-opened Monday to provide limited services with limited hours, according to Norma Tomlinson, senior ombudsman specialist with the FDIC.

Tomlinson reported that the company employed fewer than 20 people, who are expected to remain in their positions through Friday. She said the bank had two locations — a main office at 2097 Ga. Highway 20 West, in McDonough, and a branch in Abbeville, Ga. It had maintained accounts for roughly 2,200 depositors with transactional (checking and savings) accounts.

The ombudsman specialist said that, as of Sept. 30, 2010, the bank had $100.9 million in total assets and $95.5 million in total deposits (liability). Nearly 100 percent of those deposits, she added, were under the FDIC Insurance limits of $250,000.

All government direct deposits, including Social Security checks, have been redirected to United Community Bank in Blairsville, Ga., according to the state's Department of Banking and Finance. Banking activities, such as writing checks, ATM and debit card withdrawals, can continue normally for former customers of Enterprise Banking Company until Wednesday, Jan. 26.

Official checks of Enterprise Banking Company will continue to clear for customers who will be closing their accounts, added Hernandez. All insured depositors of Enterprise Banking Company are encouraged to transfer their insured funds to other banks during this week, he continued. They may do so asking their new bank to electronically transfer their deposits from the DINB, or writing checks for the amount in their accounts.

For those depositors who do not close or transfer their accounts on or before Jan. 28, the FDIC will mail checks to the address of record for the amount of the insured funds.

Hernandez said loan customers should continue to make their payments as usual.