Dawsonville-based Chestatee State Bank was seized Friday by the Georgia Department of Banking and Finance.
Assets from the failed bank were taken over by Bank of the Ozarks in Little Rock, Ark., through an agreement with the Federal Deposit Insurance Corp., according to a press release.
The bank’s accounts have been immediately transferred and its four locations reopened as Bank of the Ozarks branches, according to the release.
Philip Hester, president of Chestatee State Bank, was not available for comment.
An FDIC official speaking for the bank’s officials said customers can continue to access their accounts by writing checks or using ATM and debit cards.
Those holding loans through the bank should continue on their regular payment schedule, the official said.
“All deposits are safe and secure,” said Booker T. Shorter, senior ombudsman specialist for the FDIC. “Therefore, no customer will lose a penny.”
A second bank with Georgia ties was also seized Friday. Appalachian Community Bank, which has a branch in Fannin County, was purchased by the Peoples Bank of East Tennessee.
Chestatee State Bank operated two branches in Dawson County, one in Forsyth County and one in Pickens County. The bank was founded in 1997 and opened for business the next year.
As of Sept. 30, Chestatee State Bank had approximately $244.4 million in assets, of which $240.5 million was in deposits. Bank of the Ozarks will assume all of those deposits and essentially all of the assets.
Also as part of the agreement, the FDIC and Bank of the Ozarks will share the bank’s debt of $195.3 million.
In October 2008, Chestatee State Bank was cited by the FDIC following a review of the company’s loan policies and the performance of its management and board of directors.
At the time, Hester admitted that there were about a half-dozen ethical breaches when directors should have recused themselves from voting on a loan. He also said the failed housing market left the bank and its borrowers with a number of unsold residential sites.