State and federal regulators briefly seized all assets and deposits of Fayetteville-headquartered Southern Community Bank last weekend before turning operations over to United Community Bank of Blairsville in a pre-negotiated deal.

After all is said and done, the transaction will cost $114 million to be paid by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation, FDIC officials confirmed. The Deposit Insurance Fund is funded completely by assessments on banks across the nation, FDIC officials said.

The agreement leading to the $114 million net loss was the “least costly” resolution compared to other alternatives, the FDIC said in a press release.

The bank failure is the first in Fayette County since the Great Depression of the 1930s.

With United Community Bank basically assuming Southern Community’s operations Saturday morning, all customer accounts and services were available for use including ATM and debit cards and checking accounts. Southern Community Bank account holders will not yet be able to use any of Fayette’s other United Community Bank locations, UCB officials said.

United Community Bank agreed to purchase $364 million of Southern Community Bank’s $377 million in assets, according to the FDIC.

UCB paid a 1 percent premium to acquire Southern Community’s $307 million in deposits. UCB has also agreed to guarantee each deposit account, even those above the $250,000 cutoff for FDIC protection.

The FDIC and UCB entered into a loss-share transaction on approximately $253 million of Southern Community Bank’s assets. UCB will share in the losses on the asset pools covered under the loss-share agreement.

Customers who have questions about the transaction can call the FDIC toll-free at 1-866-308-4470 from 8 a.m.-8 p.m. More detailed information is available at www.fdic.gov/bank/individual/failed/scb.html.

As for the remaining shareholders of the bank, incorporated as Southern Community Bancshares, they are last in line to be compensated if any dividend is realized on the bank’s failure, according to FDIC rules.

The first dividend priority is to administrative expenses of the receiver (FDIC), then any deposit liability of the institution, any other general or senior liability of the institution and any subordinated obligations.

Southern Community Bank is the 38th FDIC-insured institution to fail in the nation this year, and the seventh in Georgia. The last FDIC-insured institution to be closed in the state was Silverton Bank, National Association, Atlanta, on May 1, 2009.

The Georgia Department of Banking and Finance swooped in Friday after closing time and closed Southern Community Bank down. By Georgia law, the department of banking and finance can seize the business and property of any financial institution when its becomes insolvent or is operated in an unsafe or unsound condition to transact its business.

The bank’s parent holding company had been put on notice last fall because of its precarious financial situation. Southern Community Bancshares, Inc. announced Oct. 10 that its bank subsidiary, Southern Community Bank, had agreed to the entry of a ”cease and desist” order with the Federal Deposit Insurance Corporation and the Georgia Department of Banking and Finance.

An injection of $2 million cash last fall by the bank’s major shareholders failed to turn the tide.

United Community Bank currently operates south metro locations in Fayetteville, Peachtree City, Newnan, Tyrone, Union City, Fairburn, Palmetto, Stockbridge and McDonough. This complements Southern Community Bank locations in Fayetteville, Newnan, Peachtree City, and Locust Grove.

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