The FDIC said the failure of Silverton Bank of Atlanta is expected to cost its deposit insurance fund about $1.3 billion and would represent the largest bank failure this year.
Silverton had about 1,400 client banks in 44 states. It provided services such as credit card operations, clearing accounts, investments, consulting, purchasing loans and selling loan participations.
Ron Thigpen, chief operating officer for Southeastern Financial Corp., which runs Georgia Bank & Trust and Southern Bank & Trust, said his company used Silverton to process checks.
Theyve put in place what they call a bridge bank and theyre continuing to process (checks). Theres no disruption of any client services, Mr. Thigpen said.
Remer Brinson III, president of Georgia-Carolina Bancshares, which operates First Bank of Georgia, said the Augusta bank also used Silverton for check processing.
Mr. Brinson said his firm was looking for another processor prior to the Atlanta commercial bank failure. He said the bank suffered no loss from the FDIC seizure of Silverton.
According to the FDIC, Silverton failed due to significant development and construction loan losses which eroded its capital.