Georgia Bank Failure is 21st of 2009

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Omni National Bank of Atlanta, GA was closed on Friday and is the 21st bank to fail in 2009. The bank was closed by its federal regulator, the Office of the Comptroller of the Currency. The OCC appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. For one month, the FDIC entered into an agreement with SunTrust Bank, Atlanta, Georgia, to act as paying agent for the insured deposits of the failed bank.

Omni National Bank had total assets of $956 million and total deposits of $796.8 million. At the time of its closing the bank had $2.0 million in uninsured deposits.

As the FDIC's paying agent, SunTrust will operate the failed bank's six branches until April 27. The bank had branches in Atlanta, Georgia; Dalton, Georgia; Tampa, Florida; Chicago, Illinois, Dallas, Texas; and Houston, Texas. The bank customers who do not change to another bank will become Sun Trust Bank customers after that date.

The cost to the FDIC's Deposit Insurance Fund will be $290 million. The last bank failure in Georgia was FirstCity Bank, Stockbridge, GA on March 20.

Consumer Spending Increases for Second Month

Spending by U.S. consumers in February rose for a second month, mainly reflecting an increase in prices that eroded buying power, according to a Commerce Department report issued on Friday.

The 0.2 percent gain in purchases follows a 1 percent increase in January that was larger than previously estimated, says the report. The report also shows that incomes decreased more than forecast.

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The rise of unemployment is wearing on confidence and paychecks. The report says that unemployment has placed a drag on spending, which has yet to rebound vigorously after plunging at the end of 2008. These numbers show the importance that the Obama administration's initiatives create jobs and Federal Reserve measures to revive credit take hold quickly to prevent the recession from deepening.

Economists forecast spending would rise 0.2 percent, after an originally reported 0.6 percent gain the prior month. Projections ranged from a decline of 0.5 percent to a 0.5 percent increase. Incomes dropped 0.2 percent, after a 0.2 percent increase in January.

The report also showed an acceleration of inflation. The price gauge tied to spending patterns rose 1 percent from February 2008, up from a 0.8 percent 12-month gain in January. The Fed's preferred gauge of prices climbed more than forecast by 1.8 percent. Spending dropped 0.2 percent, following a 0.7 percent gain the prior month.

Disposable income, or the money left over after taxes, dropped 0.1 percent, after going up slightly, 1.6 percent, in the month previous.