Omni National Bank of Atlanta was closed by federal regulators on Friday, the 21st U.S. bank or thrift closed during 2009.
Omni National, held by Omni Financial Services, had "experienced substantial dissipation of assets and earnings due to unsafe and unsound practices," the Office of the Comptroller of the Currency said in a press release. The holding company's shares were trading on the pink sheets for 2.5 cents before the announcement.
The failed bank was the ninth Georgia institution to fail out of the 46 bank and thrift failures during 2008 and 2009. Georgia now has the most failures during this period, with California running a close second, with eight failures. Check out TheStreet.com's bank failure map here.
The Federal Deposit Insurance Corp. was appointed receiver, and appointed SunTrust Bank, held by SunTrust Banks Inc. (Stock Quote: STI)
This is the first arrangement of this type during the current crisis. Under the agency's agreement with SunTrust, Omni's insured depositors will have until April 27 to either move their money to a new account with SunTrust or withdraw their money.
The OCC said that Omni National "depleted most of its capital, and there is no reasonable prospect that the bank will become adequately capitalized without federal assistance."
Omni National reported a tier-1 leverage ratio of 3.00% and a total risk-based capital ratio of 5.79% as of Dec. 31. These ratios need to be at least 5% and 10% for an institution to be considered well capitalized under the ordinary regulator guidelines.
TheStreet.com Ratings assigned Omni National Bank its lowest rating of E- (Very Weak) in December, based on Sep. 30 financial results. This was a downgrade from an E rating in September and a D- rating in June. The institution's capital ratios had slipped to below-well-capitalized back in March 2008, when it booked the second of five consecutive quarterly net losses as its construction and residential mortgage loan portfolios soured.