Regulators Friday closed Alpha Bank & Trust of Alpharetta, Ga., in what was the 16th U.S. bank or thrift failure this year and the second in Alpharetta.

The Georgia Department of Banking and Finance closed the institution, and the Federal Deposit Insurance Corporation was appointed receiver.

The FDIC announced Alpha Bank & Trust's two offices would reopen as branches of Stearns Bank, NA, a $1 billion institution with headquarters in St. Cloud, Minn.

Stearns Bank was set to take all of Alpha's insured deposits and approximately $39 million of the failed institution's $346 million in total assets, paying the FDIC no premium for the privilege.

The FDIC estimated the loss to its deposit insurance fund would be $158.1 million, a very large amount when considering the size of the failed bank.

Uninsured deposits totaled an estimated $3.1 million in 59 customer accounts. When a bank fails and uninsured deposits are not taken over by another institution, the depositors with uninsured balances become creditors to the FDIC receivership. These creditors usually receive some of their money back, in the form of "dividends," as the receivership disposes the failed bank's assets. In some cases, the uninsured depositors receive an immediate payment, known as an "advance dividend." In its press release on Alpha Bank & Trust's failure, the FDIC didn't announce any advance dividends.

Alpha Bank & Trust was the second bank or thrift to fail in Alpharetta, Ga. this year. Georgia regulators closed the $1.1 billion Integrity Bank on Aug. 29, with all deposits taken over by Regions Bank (held by Regions Financial ( RF)). Of course, that failure had a happier ending for some depositors, because even uninsured balances were taken over by Regions.

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