Parkway Bank, a North Carolina chartered bank headquartered in Lenoir, NC, was closed today by state regulators. Acting as receiver, the FDIC entered into a purchase and assumption agreement with CertusBank, N.A., Easley, South Carolina, which will assume all deposits of Parkway Bank.
Founded in 2001, Parkway Bank has been a problem bank for regulators for years. In 2010 the FDIC issued a Consent Order charging the Bank with unsound and unsafe banking practices. The FDIC order the Bank to correct a long list of deficiencies related to weakness in capital, management, earnings, liquidity, asset quality and sensitivity to market risk.
Parkway Bank continued to experience large losses due to nonperforming loans. According to James Sponenberg, President and CEO, “Parkway Bank is a local community bank and reflects the community’s economy.” During 2011 Parkway Bank hired a consulting team to explore the best options for raising additional capital but was unsuccessful.
Local shareholders held the majority of the shares in Parkway Bank. After trading as high as $14 in 2006, the share price went into a long and steady decline, closing today at five cents per share.
All three branches of Parkway Bank will reopen during normal business hours as branches of CertusBank. All depositors of the failed bank will continue to have uninterrupted FDIC deposit insurance coverage up to the applicable limits.
Customers of Parkway Bank can access their money over the weekend through the use of checks, ATM machines and debit cards.
At December 31, 2012, Parkway Bank had total assets of $108.6 million and total deposits of $103.7 million. CertusBank agreed to purchase $99.2 million of the failed bank’s assets with the remaining being retained by the FDIC for later disposition.
The acquisition of Parkway Bank is the fifth acquisition of a failed bank by CertusBank since 2011. CertusBank has a strong capital position and has over $1.8 billion in total assets.
The failure of Parkway Bank will cost the FDIC deposit insurance fund $18.1 million. Parkway Bank becomes the ninth banking failure of the year and the first in North Carolina.