NorthWest Bank and Trust, of Acworth, Georgia, which was established on 11 March in 2004, was closed on Friday by the Georgia Department of Banking and Finance.

NorthWest, which was founded by a group of like-minded business and community leaders six years ago and who appointed Mike Knowles (pictured) who had more than two decades of experience at Wachovia Bank, Riverside Bank, Chattahoochee Bank and Citicorp N.A., as President and CEO, had the Federal Deposit Insurance Corporation (FDIC) appointed as receiver to it following the closure.

To protect the depositors, the FDIC entered into a purchase and assumption agreement with State Bank and Trust Company, of Macon, Georgia, to assume all of the deposits of NorthWest.

The two branches of NorthWest Bank and Trust at 3891 Cobb Parkway, Acworth, GA, and 250 Church Street NE, Marietta, GA will reopen on Saturday as branches of State Bank and Trust Company.

NorthWest depositors will automatically become depositors of State Bank and Trust Company. 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, the FDIC confirmed in a statement. Customers of NorthWest Bank and Trust should continue to use their existing branch until they receive notice from State Bank and Trust Company that it has completed systems changes to allow other State Bank branches to process their accounts as well.

During the weekend, depositors of NorthWest Bank and Trust can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed, the FDIC statement said. Loan customers should continue to make their payments as usual.

As of March 31, 2010, NorthWest Bank and Trust had approximately $167.7 million in total assets and $159.4 million in total deposits. State Bank and Trust Company did not pay the FDIC a premium for the deposits of NorthWest Bank and Trust. In addition to assuming all of the deposits of the failed bank, State Bank and Trust Company agreed to purchase essentially all of the failed bank's assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $39.8 million. Compared to other alternatives, State Bank and Trust Company's acquisition was the least costly resolution for the FDIC's DIF. NorthWest Bank and Trust is the eleventh bank to be shuttered in Georgia this year. The last FDIC-insured institution closed in the state was Crescent Bank and Trust Company, Jasper, last Friday July 23, 2010.