With no warning, the North Carolina Office of Commissioner of Banks shut down the beleaguered Bank of Asheville on Friday, Jan. 21, with the Federal Deposit Insurance Corporation as receiver. First Bank, based in Troy, will take over the bank’s accounts and locations. According to the FDIC, the bank’s customers will still be able to access their accounts as normal.
“The Bank of Asheville, Asheville, North Carolina, was closed today by the North Carolina Office of Commissioner of Banks, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver,” the announcement reads. “To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Bank, Troy, North Carolina, to assume all of the deposits of The Bank of Asheville.”
The FDIC does not warn the public before it shuts down a bank.
“The five branches of The Bank of Asheville will reopen on Monday as branches of First Bank,” the announcement continues. “Depositors of The Bank of Asheville will automatically become depositors of First Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship.”
The FDIC has set up an information page for the bank’s customers on how this will affect their services.
While there was no formal warning, the Bank of Asheville was in obvious trouble since late last year, when it posted unprecedented losses tied to failed real-estate projects. The bank’s president and its chairman both resigned and it was forced to write off $14.5 million in bad loans. In addition, the bank faces a federal lawsuit over allegations it improperly allowed a $4.25 million account to be emptied. It is the third North Carolina bank to collapse in the wake of the economic downturn.
The FDIC and First Bank agreed to share the losses on $166.3 million of the bank’s assets, which totaled roughly $195.1 million, with First Bank now owning the entirety of the assets.
“We warmly welcome the customers of the Bank of Asheville,” a statement from First Bank President Jerry Ocheltree read. “Like The Bank of Asheville, First Bank is a community bank that distinguishes itself with excellent customer service provided by local bankers who you know and trust.”
— David Forbes, senior news reporter