The LaGrange, Ga.-based Frontier Bank had nine branches, including two in Sylacauga on Broadway Avenue and James Payton Boulevard and one in Childersburg on Eighth Avenue. Through an agreement with the Federal Deposit Insurance Corporation, all branches are now operating as HeritageBank of the South.
“We are pleased to welcome the customers of Frontier Bank to HeritageBank of the South and count them among our valued family of customers,” said Leonard Dorminey, president and CEO of Heritage Financial Group, in a press release.
Dorminey added that the company is “excited by the opportunities this acquisition presents to our company, including the overall continued growth of our franchise in Georgia, Alabama and Florida.”
HeritageBank is based in Albany, Ga., and has about 30 locations between three states.
The Georgia Department of Banking and Finance said in a press release that it took possession of the Frontier Bank in accordance with state code, which allows such action when any state-chartered 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.”
According to an FDIC press release, depositors of Frontier Bank automatically became depositors of HeritageBank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits.
Former customers of Frontier Bank should continue to use their existing branch until they receive notice from HeritageBank of the South that it has completed systems changes to allow other HeritageBank branches to process their accounts as well.
Over the weekend, depositors of Frontier Bank could access their money by writing checks or using ATM debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make payments as usual.
According to the FDIC, Frontier Bank had approximately $258.8 million in total assets and $224.1 million in total deposits as of December 31, 2012. In addition to assuming all the deposits of the failed bank, HeritageBank of the South agreed to purchase essentially all of the assets.
No advance notice is given to the public when a financial institution is closed.
Customers with questions should call the FDIC toll free at 1-866-674-8944. The phone number is operational from 9 a.m. until 5 p.m., Eastern Time. Interested parties can also visit the FDIC’s website at www.fdic.gov/bank/individual/failed/frontier-ga.html.
The FDIC estimates that the cost to the Deposit Insurance Fund will be $51.6 million.
Frontier Bank is the fourth FDIC-insured institution to fail in the nation this year, and the first in Georgia. Other Frontier Bank branches were located in Valley, Auburn, Chelsea, Pelham and Vincent.
Alabama Trust Bank was the last bank closed in Sylacauga when it was taken over by federal regulators in May 2012 due to a dissipation of assets because of unsound practices. It now operates as Anniston-based Southern States Bank.
Contact Emily Adams at email@example.com.