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Published Tuesday, June 30, 2009 in Local
Photo by Jeffrey Leo
As deputies keep watch at the door, Marvin B. Payne, regional ombudsman for the Federal Deposit Insurance Corporation, front, and Robert L. Johnson, chief executive officer of CharterBank, exit the former main office of Neighborhood Community Bank.
Bank says transition smooth
By Jeff Bishop
The Times-Herald
It was "business as usual" Monday and over the weekend at CharterBank -- formerly the failed Neighborhood Community Bank -- according to the FDIC.
"It's been a smooth transition from Neighborhood Community Bank to CharterBank," said Marvin Payne, FDIC ombudsman, who was on hand for the takeover Friday in Newnan.
"Everything is remaining the same, for now," said Payne. "The only difference the customers will see is a change in the name of the institution.
"But the products and services that were made available last week, those same products and services now exist for the customers of CharterBank."
On Friday morning a petition for appointment of a receiver was filed in Coweta County Superior Court by the Georgia attorney general's office. The petition included a resolution drawn up by the Neighborhood Community Bank board of directors on June 17, stating that the "financial condition of Neighborhood will not permit it to meet the requirements" of a Sept. 2, 2008 written agreement with the Federal Reserve Bank of Atlanta and the Commissioner of the Department of Banking and Finance.
"Neighborhood's capital position as of June 17, 2009 has been determined to be at a level that represents a significant safety and soundness exposure to the institution, and places Neighborhood at a risk of becoming critically undercapitalized," the Board of Directors stated. The board -- which no longer controls the bank -- included Joe S. Crain Jr., Otis Jones III, David LaGuardia, Dr. Bob Mann, Jr., Theo Mann, J. Walker Moody, James Van S. Mottola, Melvin Samuels, Donald Sprayberry, and Jennifer Thomasson.
The FDIC was immediately appointed as receiver by the court.
"As former Neighborhood Community Bank customers, you are now customers of CharterBank. Your deposits are safe, sound and readily accessible," said CharterBank CEO Robert Johnson in an open message on the bank Web site.
CharterBank has 10 retail locations along the I-85 corridor from Auburn, Alabama to LaGrange, Georgia, and loan production offices in Columbus, Newnan and Norcross.
Neighborhood Community Bank is Georgia's ninth bank failure this year, and the 45th nationwide. Georgia leads the nation in bank failures, despite being home to just four percent of the country's banks.
Joe Brannen, president and CEO of Georgia Bankers Association, said Monday, "Bankers and regulators make tremendous efforts to keep institutions open, but in some unfortunate cases, these actions are part of the necessary healing process for our banking system to ensure overall stability.
"Bank performance, like that of other businesses, is a direct reflection of local economic conditions. The economy and local real estate market remains weak, so some banks continue to struggle."
Neighborhood's failure was "mostly due to high levels of distressed construction and development loans," Brannen said.
"While there have been several closures in a short period, 92 percent of the banks operating in Georgia meet the criteria for being well capitalized by regulators and have adequate reserves to weather the ongoing stresses to the economy," he said.
"Each bank's financial stability should be evaluated on its own merits. Speculation about other institutions based on today's news could cause unnecessary worry about banks that are doing just fine."
Payne agreed that "the last thing anyone wants to do is trigger a bank run."
That's why the FDIC does not give advance notice of bank failures, Payne said.
"The FDIC does not comment on the affairs of open banks," he said -- including First Coweta Bank, Newnan's other local bank operating under an agreement with regulators to "cease and desist from unsafe and unsound practices."
"The intent is to give an operating institution every opportunity to address whatever issues they need to address to allow the entity to continue as a going concern," said Payne.
"If the FDIC were to speak publicly about an institution, it could cause that institution more harm than good," he said.
Since the FDIC insures the deposits, customers should have little reason for concern, in any case, he said.
"At Neighborhood Community Bank, no one lost a cent" of their deposits, he said.
"Over the next several weeks we will be working to complete the transition process to CharterBank," said Johnson. "There will be new signage, but the same friendly faces you've come to know will be there ready to serve you.
"You won't believe the good things coming your way, and trust me we're truly excited to become a part of your community."
Comment On This Story
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I worked very briefly for this institution, and I must say it was the poorest managed bank I have ever been associated with. The work environment was terrible. Employees came and went like a revolving door.
Posted by Anoyomous at 3:13 PM
Good question. Where is the GBI? Giving preferential loans to Board members and putting loans in other people's names is fraud. Investors need to wake up.
Posted by joey at 11:08 AM
I was a passive investor in this bank and I lost everything I invested in it. If they committed fraud, there is no avoiding repercussions for them. I'm not going to let my anger over my loss cause me to make blanketed accusations of fraud and criminal activity. Of course since I'm not using my last name I could write anything without consequence. Oh, and where are the GBI and the Feds if there was so much illegal activity?
Posted by Robert H at 10:47 PM
next to go, as soon as the FDIC can get to it
Posted by galdoff at 9:15 PM
no, they are bashing the board members for their incompetence, lack of oversight, and the massive number of totally bogus loans to themselves and their buddies - the passive investor got taken to the cleaners because these crooks ran this bank into the ground.
Posted by joey at 4:49 PM
I find it interesting that shareholders are coming here to anonymously bash the boardmembers for their "greed." Really, and I take it you bought your stock just to unselfishly make money for others? Though unlike the boardmembers, you could have sold it when it shot to nearly 40$ without SEC filings. I guess you didn't because perhaps you were, ummm, greedy.
Posted by Robert H at 11:56 AM
The board included Joe S. Crain Jr., Otis Jones III, David LaGuardia, Dr. Bob Mann, Jr., Theo Mann, J. Walker Moody, James Van S. Mottola, Melvin Samuels, Donald Sprayberry, and Jennifer Thomasson. I for one will no longer do business with these greedy people.
Posted by Mark at 10:57 AM
Frank I read the FDIC statment and unfortunetley Stockholders are last in priority of claims and will most likely not see any recovery of their stock. VIII. Priority of Claims In accordance with Federal law, allowed claims will be paid, after administrative expenses, in the following order of priority: Depositors General Unsecured Creditors Subordinated Debt Stockholders
Posted by Ryan at 6:02 AM
We know the money in our accounts is safe. We don't need anyone on the other end of the line to tell us that. The question we want answered is about our stock investments. We haven't received a returned phone call after 5 messages have been left. Time-Herald, is this not an article that needs to be written? We should all make it a point not to do business with the former board members starting today.
Posted by Frank at 7:11 PM
I'm just glad that there IS an FDIC. As a depositor at the (former) NCB I could have lost everything overnight.
Posted by Room405 at 5:40 PM
"The love of money is the root of evil..." It now seems like the greed of the board members of this bank has finally caught up with them. Those listed in this article should be ashamed of the way they mismanaged the bank's affairs. The people who have lost a lot of money will never forget the promises made by these "respectable businessmen". CharterBank is a great institution, and is a welcome change in this community. I know it is managed by those who have integrity!
Posted by Karen at 3:47 PM
Number 0ne,being crooked is not being successful (which you did not spell right).I made money honest not wrongfully.As for Disaster,you go BOY !
Posted by Money Man at 3:41 PM
The actions of a few irresponsible people should not speak for an entire organization. As outsiders it is easy to sit back and point fingers, but we should try to remember the good and honest employees that are stuck in the middle of this mess. It can't be easy for them and their families. I hope they can keep their jobs.
Posted by Informed at 3:26 PM
no the Federal Reserve and GA state banking regulators are in charge of keeping banks in line. FDIC just shows up when the bank fails. it's one thing to lose money due to legit economic reasons, and a WHOLE other thing to lose your investment due to incompetence and fraud.
Posted by joey at 2:54 PM
You people sure are jealous of the local businessmen that are smart enough to be sucessful. Go find your own sucess and stop berating them and spreading lies because they have made some money and you haven't. The economy is not the fault of any one person or group of people. Is NCB the first bank in the country to fail this year???
Posted by S at 2:44 PM
I thought the FDIC was in charge of banks. So why would the GBI get invovled in bank business. Don't like how a bank is doing business then go elsewhere. Lost money in stock then consider it a lesson learned and cut your less and move your money.
Posted by C at 12:18 PM
Look at who owns OutMed !!!Answers a lot of questions.You are right,wheres the GBI and FEDS!
Posted by Married Couple at 11:31 AM
The same OutMed principals were responsible for the demise of Newnan Hospital. Please go and read the Superior Court case- Newnan Hospital vs Georgia Rehabilitation Center- David Butler, Esq. Receivership. You will see exactly the same scenario. Where is the GBI when you need them?
Posted by Concerned Citizen at 11:03 AM
Look at who the board members are and you should understand why it went down.There are a couple of other local banks that people really need to start looking at who is on the board.Can't blame it on the economy.All the bad economy is doing is bringing attention to wrong doings higher up.When things were good,wrong doings could be covered up.I think its great!Look at Madoff,would not have gotten caught if the economy had not gone sour.
Posted by Married Couple at 10:34 AM
This bank failed because of poor management and self dealing. The Feds came in and retrained the bank employeees on such things as how to make loans. As the bank president was leaving he made sure to tell everyone how great the bank was doing. At least two of the board members should do jail time.
Posted by Big Chief at 10:31 AM
Why all the complaining? Newnan is a good ole boy city. The good ole boys wanted a bank, they asked locals to invest in, and the locals lost out, but their pockets are fill FAT!!! Classic Newnan.
Posted by Michelle at 10:27 AM
Didn't we all invest in the local banks to make money? I know I wanted to make some money. What I didn't foresee was the economy taking a nose dive. So before we go calling people greedy let's check ourselves first.
Posted by C at 9:44 AM
I hope investors will file a class action lawsuit. The truth about what happened here needs to come out.
Posted by Big Chief at 9:40 AM
Greed is right. When the biggest real estate brokers in the county get together to create a bank to "fund" their ventures, they loose site of the long term needs of their customers.
Posted by Nobody's Fool at 9:28 AM
Totally agree that this is not a failure totally based on the poor economy. We have had major problems with this bank since 2006. We have tried to take legal action againist them several times, we haven't found a lawyer that would take our case yet. As a customer, they have treated us lower than the low. You would not believe what they have put our family though.
Posted by RE: Smooth Ride at 8:45 AM
The two lead officers and several board members smoothly rode this bank into the ground through miss management and arrogant greed. I am one stock holder that will be looking to the justice system to pursue those responsible. No one familiar with the inner workings of NCB is fooled for a minute that the failure is the result solely of a poor economy. I hope to see the president, vice president and no less than a couple board members held criminally accountable.
Posted by Stay Right at 7:08 AM
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Bank!
7/2/2009
Link To This Comment
Maybe they can run for a county office... Sound like they meet the requirements...
Posted by County Resident at 5:48 PM