The Federal Deposit Insurance Corporation was appointed as receiver and brought in 54 people Friday afternoon at 5 p.m. to assume the three bank branches, including a closing manager, attorneys, facilities and security people, accountants, asset managers and other personnel.
As of March 31, First Cherokee State Bank had about $222.7 million in total assets and $193.3 million in total deposits, according to the FDIC.
The FDIC entered into a purchase and assumption agreement with Community & Southern Bank of Atlanta to assume the deposits of First Cherokee State Bank.
The FDIC earlier on Friday shut down Georgia Trust Bank of Buford in Gwinnett County, which was also assumed by Community & Southern.
“The bank was assumed, and it will be business as usual when the bank reopens,” said Eric Raines, spokesperson for the FDIC, of the Cherokee County closing.
Raines said he is on site to deal with customers and their questions and help employees to work with clients of the bank. He and many of the other FDIC personnel will be on hand for several days during the transition.
The Canton branch will be open on Saturday from 8:30 to noon, and the main office in Woodstock and the Cobb County branch will open for regular hours on Monday, he said.
Raines said the local bank failed because of the weakened economy and its heavy involvement with acquisition, development and construction lending.
“Those borrowers were unable to repay loans, and that caused the bank to be structurally unprofitably and eroded their capitol level,” Raines said. “That is why they were declared insolvent.”
Depositors of First Cherokee State Bank will automatically become depositors of Community & Southern Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits, he said.
Customers of First Cherokee State Bank should continue to use their existing branch until they receive notice from Community & Southern Bank that it has completed systems changes to allow other Community & Southern Bank branches to process their accounts as well.
This evening and over the weekend, depositors of First Cherokee State Bank 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.
Community & Southern Bank will pay the FDIC a premium of 0.50 percent to assume all of the deposits of First Cherokee State Bank.
In addition to assuming all of the deposits of the failed bank, Community & Southern Bank agreed to purchase essentially all of the failed bank’s assets.
The FDIC and Community & Southern Bank entered into a loss-share transaction on $141.8 million of First Cherokee State Bank’s assets.
Customers with questions can call the FDIC toll-free at 1-800-640-2751.