Jason Sandford
Jason Sandford is a reporter, writer, blogger and photographer interested in all things Asheville.
There are lots of stories about the failure of the Bank of Asheville. Here are a few snippets. First, from the Asheville Citizen-Times:
The Bank of Asheville has struggled in the recession.
Last August, officials said the bank was writing off $14.5 million in bad loans, about three-fourths of which were for real estate. And last year, the stock price of the bank’s parent company dropped to pennies a share.
In November, The Bank of Asheville sued its former president and CEO, alleging he improperly allowed a local developer to withdraw funds from accounts at the bank.
The closure announcement came in a news release from the FDIC on Friday evening after the North Carolina Office of Commissioner of Banks closed the bank and appointed the FDIC as receiver. The Commissioner of Banks has “the authority to pull the charter. Once a bank’s charter is pulled, the bank ceases to exist,” Hernandez said.
The FDIC then “entered into a purchase and assumption agreement with First Bank, Troy, North Carolina, to assume all of the deposits of The Bank of Asheville,” according to the release.
From ProblemBankList.com:
The FDIC continues the somewhat troubling practice of selling failed banks to banks that still owe TARP money to the U.S. taxpayers. First Bancorp, holding company for First Bank, has an outstanding TARP loan to U.S. Treasury of $65 million. Common sense would lead one to conclude that banks unable to payback assistance from the U.S. taxpayer would certainly not be classified as the soundest banks in the country. First Bank, for example, has a troubled asset ratio of 54%, which is 3.6 times the national average of 15.
Last year the FDIC sold 18 failed banks to banks that still owe $1.2 billion in TARP money. Why would the FDIC sell failed banks to other banks that are arguably weak, as indicated by the fact that they have still not repaid TARP funds?
If you want to know the how and why the FDIC takes over a bank, this is a great story that ran on NPR:
http://www.npr.org/templates/story/story.php?storyId=102384657
Uh, folks… this has been happening around the country for some time now. Island AsheVegas is just waking up to it.
There have been long articles in the NY Times and the WSJ print and online.
You can spew rhetoric and naval gaze or you can read. Don't have the money? Visit a library. They will let you read, in silence away from the fog horn clarion of ideologues.
I will be very interested in seeing what happens to the lawsuit Bank of Asheville had against Buddy Greenwood. He was the former bank president that left and was later sued for allowing Keith Vinson (developer extraordinaire; google him) to take loans not authorized by the regular channels.
The Bank of Asheville should have been taken over a long time ago!
What happens here? Does a different banking company take over operations at this location, with all the same employees? What about most of the same employees? If bad loans were the reason for the sale/takeover, then shouldn't the people who made the bad loans be on the outs? The decisions were made by people. The risks were taken by people. If the Troy Bank just "assumes control", but all the same people work there, I don't think that is a good plan. I know that people get attached to bank employees the same way they would a hairdresser or a bartender, and they want their favorite person to stay. But what's up? Do they clean house?
"Why would the FDIC sell failed banks to other banks that are arguably weak, as indicated by the fact that they have still not repaid TARP funds?"
Because they are a bunch of venal incompetents that care more about short-term political gain and bribery than sound financial principles?