Regulators shut down the Farmers Bank of Lynchburg, Tenn., today, the third bank to fail in Tennessee so far this year.
Clayton Bank and Trust of Knoxville will take over the deposits of the failed bank and reopen its four branches on Saturday, including one branch that operates as First State Bank.
In a statement, the Federal Deposit Insurance Corp. said Farmers Bank had "impaired capital, unsound condition and inability to continue normal operations." The FDIC estimates the bank failure will cost its insurance fund $28.3 million.
Over the weekend, depositors of the failed Farmers Bank can access their money by writing checks or using ATM or debit cards, according to FDIC spokesman Greg Hernandez.
The Farmers Bank of Lynchburg had $156.4 million in deposits and $163.9 million in assets.
The FDIC said Farmers Bank of Lynchburg is the 31st bank in the United States to fail this year.