Jackson-based McIntosh State Bank fails

Photo by Heather Middleton

Photo by Heather Middleton

By Michael Davis


McIntosh State Bank, of Jackson, was shut down Friday afternoon by state regulators, and its deposits were turned over to a Hoschton, Ga. bank, the Federal Deposit Insurance Corp., announced.

The FDIC said it had been appointed receiver by the state Department of Banking and Finance, and that Hamilton State Bank would assume all of McIntosh's deposits, along with a substantial portion of its assets.

McIntosh's four locations -- Jackson, Locust Grove, McDonough and Monticello -- will open Saturday as Hamilton State Bank branches.

Also on Friday afternoon, United Bank announced that it had acquired McIntosh Financial Services, an investment brokerage that belonged to the same holding firm as McIntosh Bank. A United Bank official said the sale of McIntosh Financial Services was handled Friday as a separate transaction from the closure of the bank.

The FDIC said McIntosh Bank deposits would continue to be insured as normal, and that Friday evening and over the weekend, depositors could access their money by writing checks, or using ATM and debit cards. Deposit accounts at McIntosh will automatically become deposit accounts at Hamilton.

United Bank said it would operate McIntosh Financial Services under the same name. John Rainwater, president of United's Jackson division, said McIntosh Financial Services would be operated as a wholely-owned subsidiary of United, and similar to its existing Trust and Investment Department. He said McIntosh Financial's chief, Alicia Washington, had been hired by United as the McIntosh investment officer.

McIntosh State Bank is the 13th FDIC-insured institution in Georgia to fail this year, and the 46th in the nation, the FDIC said.

McIntosh State Bank's total assets were $339.9 million, with total deposits of $324.4 million, as of March 31, the FDIC said. Hamilton will pay the FDIC a 0.5-percent premium to assume the deposits of the bank, and will assume "essentially all of the assets," according to the FDIC statement. The FDIC estimated the cost to the Deposit Insurance Fund would be $80 million.

McIntosh, which was started in 1964 by businessmen in Jackson, like many institutions that have failed in recent years, was weighed down with under-performing loans tied to construction and real estate, FDIC Senior Ombudsman Specialist Edith Gray said Friday.

She could not provide specific information on the amount of under-performing loans.

She said FDIC personnel would be working at the bank Friday night and over the weekend to make the transition. "Over the weekend, the FDIC employees will be basically settling and closing out the books on McIntosh State Bank ... and will transfer all of those records to Hamilton State Bank," she said.

She said Hamilton State Bank had entered into a loss-share agreement with the FDIC, which covers a portion of losses Hamilton may incur in the future on assets it is buying in the transaction.

The FDIC said it entered into the loss-share agreement with Hamilton on $242.1 million of McIntosh State Bank's assets.

Gray stressed that there would be no disruption to services that McIntosh customers are receiving. "We want the message to be: It's business as usual," she said.

Hamilton State Bank operates branches in Jackson, Hall, Gwinnett, Forsyth, White and Barrow counties. Bank Vice President Ginger Hubbard said Hamilton has 10 locations, with its acquisition of McIntosh bringing that number to 14. She said that Saturday morning, McIntosh's staff would return to the local branches, and that Hamilton would have representatives there as well, to inform customers about the institution taking over.

"We have recently raised capital so that we can grow our branch network, and that's why we're here," Hubbard said. "We've worked hard to prepare for growing our branch network, and it's just really exciting for us to have an opportunity to come here and be a part of this process."

She said Hamilton, in April, acquired a bank in Bartow County with four branches.

McIntosh has been fighting its troubles for several years. The bank closed its Lake Oconee location in 2009, and last year, it trimmed 25 percent of its workforce as part of a restructuring plan.

McIntosh's Chairman and CEO William K. "Pete" Malone said in a September 2010 interview that the bank had had to trim staff two other times in the prior two years. He said that the bank had once had a plan to grow to $1 billion in assets, and had grown to 147 employees as it prepared to reach that level and maintain customer service.

On Friday, Rainwater, the United Bank president, said his bank had tried through the FDIC to acquire McIntosh State Bank, but was ultimately out-bid. United Bank acquired, in 2008, the four branches of First Georgia Community Bank, including the Jackson office.

"In the end, our bid was not sufficient" to acquire McIntosh State Bank, he said.

He said McIntosh had been a good competitor, and approached community banking in a similar fashion. "This is not good news for Jackson, whenever an institution like McIntosh goes away," he said.