Community Capital Bank, Jonesboro, GA, Closed By Regulators

State regulators closed Community Capital Bank of Jonesboro, GA, today and appointed the FDIC as receiver. The FDIC sold the failed bank to State Bank and Trust Company, Macon, GA, which will assume all deposits and purchase all assets of Community Capital Bank.

Community Capital Bank began operations in August 2002.  The Bank was owned by local business owners and operated in south-metro Atlanta.  According to the Bank’s website, Community Capital was operated by managers who “understand the importance of experienced, professional bankers who are empowered to make local decisions.” The Bank rapidly expanded its assets to almost $200 million by 2008.

In a mid 2008 letter to shareholders, Bank President Kevin Brumbeloe expressed optimism that business conditions would quickly turn around for Community Capital.

Banking has never been more challenging than it is today. The credit crunch has been in full swing for over a year now and most metro Atlanta banks are feeling the pain from new residential construction and subdivision development loans, some more than others. CCB did not escape this negative pain completely, but we have been successful in navigating through these times and have the capital position to withstand the negative impact of these loan assets and continue our growth strategy. I believe the economy will be sluggish in the coming few quarters due to the effects of the credit crunch but opportunities will be there for us to add to our market share and continue to grow our franchise.

Economic conditions worsened considerably and by the middle of 2010, Community Capital was experiencing a soaring level of loan defaults.  Even prior to the financial crisis, the Bank was having financial difficulties and in April 2009 regulators issued a Cease and Desist Order citing “unsafe and unsound” banking practices.

At June 30, 2011, Community Capital Bank had total assets of $181.2 million and total deposits of $166.2 million.  State Bank and Trust agreed to purchase all of Community’s assets, subject to a loss-share transaction with the FDIC that covers $141.3 million of the assets acquired.  The loss-share transaction limits future losses to State Bank and Trust and the agreement is used as an incentive by the FDIC in selling failed banks.  The FDIC maintains that losses are minimized by keeping failed banking assets in the private sector.

State Bank and Trust Company has now acquired a total of 12 failed banks in Georgia since 2009.  Founded in 2005, State Bank and Trust Co was funded by private investment capital with the express purpose of acquiring failed banks in FDIC assisted transactions.  State Bank and Trust has quickly grown to almost $3 billion in assets and is one of the best capitalized banks in Georgia.

The holding company for State Bank and Trust is State Bank Financial Corp (STBZ).  In early 2011, the Bank went public, but so far, the stock has proven to be a big disappointment for investors who have seen the value of the shares drop from $18 in February to a recent price of $13.47.

The estimate loss on the failure of Community Capital is $62.0 million.  Community Capital Bank is the nation’s 83rd banking failure and the 22nd in Georgia.