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NEWSLETTER SIGN UPCommunity Bank and Trust, headquartered in Cornelia, was closed Friday by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
The 36 branches of Community Bank and Trust, including branches in Barrow County, are to reopen during normal business hours as branches of SCBT, N.A., of Orangeburg, S.C., but will continue to conduct business under the name Community Bank and Trust. The FDIC entered into a purchase and assumption agreement with SCBT, N.A., to protect the depositors.
Community Bank and Trust also has branches in Jackson, Banks, Clarke, Oconee, Habersham, Hall, White, Rabun and Stephens counties in Northeast Georgia.
The bank has been under a cease and desist order since mid-summer to satisfy regulators related to what the FDIC described as unsafe business practices.
The FDIC had instructed Community Bank and Trust to raise additional capital and reclassify bad loans and to restructure its board operations and alter its management practices during its probationary period.
Operating with less than satisfactory management and board of directors’ oversight, operating with inadequate equity capital and reserves, operating with a large volume of poor-quality loans and operating with an inadequate allowance for loan and lease losses were cited as unsafe practices.
Depositors of Community Bank and Trust are being automatic depositors of SCBT, N.A., and deposits will continue to be insured by the FDIC. Customers do not need to change their banking relationship to retain their deposit insurance coverage. Customers should continue to use the former Community Bank and Trust branch until they receive notice from SCBT, N.A. that it has completed systems changes to allow other SCBT, N.A. branches to process their accounts as well.Over the weekend, depositors of Community Bank and Trust can access their money by writing checks or using ATM or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.
As of Sept. 30, 2009, Community Bank and Trust had approximately $1.21 billion in total assets and $1.11 billion in total deposits. SCBT, N.A. did not pay the FDIC a premium to assume all of the deposits of Community Bank and Trust. In addition to assuming all of the deposits, SCBT, N.A. agreed to purchase essentially all of the failed bank’s assets.
The FDIC and SCBT, N.A. entered into a loss-share transaction on $827.7 million of Community Bank and Trust’s assets. SCBT, N.A. 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 1-800-430-7974. The phone number will be operational Saturday from 9 a.m. to 6 p.m., EST; on Sunday from noon to 6 p.m., EST; and thereafter from 8 a.m. to 8 p.m., EST. You can also visit the FDIC’s Web site at http://www.fdic.gov/bank/individual/failed/cbt-cornelia.html.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $354.5 million. SCBT, N.A’s acquisition of all the deposits was the "least costly" resolution for the FDIC’s DIF compared to all alternatives.
Community Bank and Trust is the 13th FDIC-insured institution to fail in the nation this year, and the second in Georgia. Locally, Freedom Bank and First Piedmont Bank were closures in FDIC actions in 2009.
