The Bank of Essex has assumed $600 million in deposits previously held by The Community Bank in Loganville, Ga.
A Richmond-based bank has gobbled up deposits of a failed Georgia bank.
Tappahannock-based Bank of Essex has assumed $600 million in deposits previously held by The Community Bank in Loganville, Ga.
The Bank of Essex is a subsidiary of Community Bankers Trust Corp., which also owns the Bank of Goochland, Bank of Powhatan, Bank of Louisa and Bank of Rockbridge; all together, the trust operates 13 full service branches in Virginia. The Community Bankers Trust holds $1.3 billion in assets and $1.1 billion in deposits and has headquarters in Glen Allen.
The company expects to show an increase in earnings after a full quarter of combined operations. There are no plans to permanently relocate Bank of Essex employees to Georgia, but Vice Chairman Gary Simanson said the bank has a team there now and will continue to have people shuttling back and forth. Simanson said the company anticipates expansion in the greater Atlanta market.
Georgia state regulators shut down The Community Bank on Friday, turning over deposits of $611 million and assets of $681 million to the Federal Deposit Insurance Corp. The bank was the third bank in Georgia and 20th in the country to close this year.
“[Because of] poor loan underwriting and credit administration, and deterioration of the real estate market locally in Atlanta, it was not possible for the bank to continue operations,” said Andrew Grey, a spokesperson for the FDIC.
The bidding process to acquire TCB began about a week ago. Grey said the Bank of Essex’s offer to purchase all deposits and $84.4 million of assets was the least costly resolution for the FDIC. The FDIC will retain almost $600 million of TCB’s troubled assets, mostly real estate and commercial and construction loans. The federal deposit insurance fund will lose between $200 million and $240 million to secure those loans.
The $84.4 million worth of assets purchased by Bank of Essex include cash, federal funds and securities, but no loans. The bank has 60 days to decide whether it will purchase additional assets. The Virginia bank also paid the FDIC a $3.2 million premium to complete the deal.
The Community Bank’s four branches in greater Atlanta were slated to reopen yesterday under the name Essex Bank, a division of the Bank of Essex. In Virginia, Bank of Essex operates eight branches; inlcuding one in Glen Allen and another in Mechanicsville.
Expanding the Essex franchise outside the state has been a part of the trust’s strategic plan, and the acquisition of TCB, which was founded in 1946, marks that departure. Simanson said they decided to pursue TCB because of its reputation as a community bank.
“It was a good core community bank very similar to the type of banks we operate, been around for 60 years, long established in the community with strong customer relationships,” Simanson said. “The unfortunate thing for The Community Bank was that they had an over-concentration of acquisition and development and land loans.”