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Hamilton State Bank, Hoschton, Georgia, Assumes All of the Deposits of the First State Bank, Stockbridge, Georgia

FOR IMMEDIATE RELEASE
January 20, 2012
Media Contact:
LaJuan Williams-Young
Office: 202-898-3876
Email: lwilliams-young@fdic.gov

The First State Bank, Stockbridge, 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 Hamilton State Bank, Hoschton, Georgia, to assume all of the deposits of The First State Bank.

The seven branches of The First State Bank will reopen during their normal business hours beginning Saturday as branches of Hamilton State Bank. Depositors of The First State Bank will automatically become depositors of Hamilton State 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 The First State Bank should continue to use their existing branch until they receive notice from Hamilton State Bank that it has completed systems changes to allow other Hamilton State Bank branches to process their accounts as well.

This evening and over the weekend, depositors of The First State 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 September 30, 2011, The First State Bank had approximately $536.9 million in total assets and $527.5 million in total deposits. Hamilton State Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of The First State Bank. In addition to assuming all of the deposits of the failed bank, Hamilton State Bank agreed to purchase essentially all of the assets.

The FDIC and Hamilton State Bank entered into a loss-share transaction on $419.5 million of The First State Bank's assets. Hamilton State 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 with questions about today's transaction should call the FDIC toll-free at 1-800-405-8251. The phone number will be operational this evening until 9:00 p.m., Eastern Standard Time (EST); on Saturday from 9:00 a.m. to 6:00 p.m., EST; on Sunday from noon to 6:00 p.m., EST; on Monday from 8 a.m. to 8 p.m., EST; and thereafter from 9:00 a.m. to 5:00 p.m., EST. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/failed/firststatebank-ga.html.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $216.2 million. Compared to other alternatives, Hamilton State Bank's acquisition was the least costly resolution for the FDIC's DIF. The First State Bank is the second FDIC-insured institution to fail in the nation this year, and the first in Georgia. The last FDIC-insured institution closed in the state was Community Bank of Rockmart, Rockmart, on November 10, 2011.