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Citizens South Bank, Gastonia, North Carolina, Assumes All of the Deposits of New Horizons Bank, East Ellijay, Georgia

FOR IMMEDIATE RELEASE
April 15, 2011
Media Contact:
Greg Hernandez (202) 898-6984
Cell: (202) 340-4922
Email: ghernandez@fdic.gov

New Horizons Bank, East Ellijay, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Citizens South Bank, Gastonia, North Carolina, to assume all of the deposits of New Horizons Bank.

The sole branch of New Horizons Bank will reopen on Monday as a branch of Citizens South Bank. Depositors of New Horizons Bank will automatically become depositors of Citizens South Bank. 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. Customers of New Horizons Bank should continue to use their existing branch until they receive notice from Citizens South Bank that it has completed systems changes to allow other Citizens South Bank branches to process their accounts as well.

This evening and over the weekend, depositors of New Horizons Bank can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

As of December 31, 2010, New Horizons Bank had approximately $110.7 million in total assets and $106.1 million in total deposits. Citizens South Bank will pay the FDIC a premium of 1.0 percent to assume all of the deposits of New Horizons Bank. In addition to assuming all of the deposits of the failed bank, Citizens South Bank agreed to purchase essentially all of the assets.

The FDIC and Citizens South Bank entered into a loss-share transaction on $84.7 million of New Horizons Bank's assets. Citizens South Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers. For more information on loss share, please visit: http://www.fdic.gov/bank/individual/failed/lossshare/index.html.

Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-930-5170. The phone number will be operational this evening until 9:00 p.m., Eastern Daylight Time (EDT); on Saturday from 9:00 a.m. to 6:00 p.m., EDT; on Sunday from noon to 6:00 p.m., EDT; and thereafter from 8:00 a.m. to 8:00 p.m., EDT. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/newhorizons.html.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $30.9 million. Compared to other alternatives, Citizens South Bank's acquisition was the least costly resolution for the FDIC's DIF. New Horizons Bank is the 30th FDIC-insured institution to fail in the nation this year, and the eighth in Georgia. The last FDIC-insured institution closed in the state was Bartow County Bank, Cartersville, earlier today.