The Office of Inspector General (OIG) of the Federal Deposit Insurance Corporation (FDIC) has issued a Material Loss Review of Community Bank & Trust – West Georgia.
On May 1, 2026, the Georgia Department of Banking and Finance (GDBF), closed Community Bank & Trust – West Georgia and appointed the FDIC as the receiver. The FDIC’s estimated loss to the Deposit Insurance Fund (DIF) was $97 million or 34-percent of the bank’s $285 million in total assets.
We conducted a Material Loss Review to (1) determine why Community Bank & Trust’s problems resulted in a material loss to the DIF; (2) evaluate the FDIC’s supervision of Community Bank & Trust, including the FDIC’s implementation of the Prompt Corrective Action (PCA) requirements of Section 38 of the Federal Deposit Insurance Act; and (3) make recommendations for preventing any such loss in the future.
We found that Community Bank & Trust’s failure occurred due to deficient management and Board oversight of its aggressive growth strategy and its rapidly deteriorating asset quality, which depleted its capital. Specifically, bank management did not implement adequate risk management practices, sufficient internal controls, or effective oversight methods in response to the new strategy. Ultimately, the bank’s origination and acquisition of an excessive volume of low-quality problem assets led to significant operating losses and capital erosion.
In assessing the FDIC’s supervision of the bank, we determined that FDIC supervision and enforcement activities associated with the bank were generally timely, adequate, and conformed to PCA requirements. However, we identified opportunities for improvement to further strengthen the FDIC’s supervisory capabilities and protect the DIF from future losses. Specifically, we determined that the FDIC could improve its:
- coordination efforts with Federal agencies that administer Government-guaranteed loan programs,
- supervisory response when off-site monitoring information demonstrates elevated risk, and
- application of existing guidance over loan classifications for Government-guaranteed loans.
We made three recommendations intended to improve the FDIC’s supervisory capabilities and help prevent future losses to the DIF. The FDIC concurred with each of the recommendations and plans to complete corrective actions by August 31, 2027.