Regional Report Eastern August 2012
East banks take strike three
In June, the N.C. Office of the Commissioner of Banks shuttered Waccamaw Bank, the first financial institution in the state closed by regulators this year. The Whiteville-based bank’s demise makes three failures in the East since the recession began, more than in any other region of the state. Waccamaw’s former headquarters is about 45 miles west of Wilmington, where regulators closed Cape Fear Bank and Cooperative Bank within months of each other in 2009. “It’s a geographic footprint problem,” says Ray Grace, acting commissioner of banks. The value of coastal real estate skyrocketed during the early and mid-2000s, leaving banks with unmanageable development loans when the market bottomed out. The only other two bank failures in North Carolina since the recession occurred in the mountains (“Out of Order,” June 2011, and Regional Report, December 2011). Nearly 15-year-old Waccamaw’s capital levels deteriorated amid mounting troubled assets, which totaled $50.9 million as of March, according to Bank Tracker, an American University investigative project. That gave it a troubled-asset ratio well above the national median. Federal Deposit Insurance Corp. was named receiver of Waccamaw, and Bluefield, Va.-based First Community Bancshares Inc. acquired its 16 branches, $515 million of its $533 million in assets and $428 million in deposits.
FDIC is suing executives and directors of Cape Fear and Cooperative, though it’s too soon to know if it will follow suit against Waccamaw. The regulator alleges Cape Fear’s leaders engaged in speculative growth centered on commercial real estate and opened five branches that were not properly monitored, according to the suit, which claims that those decisions cost the Deposit Insurance Fund $141 million in losses. The FDIC wants even more money from Cooperative officials. In 2001, the bank, which was more than 100 years old, started an aggressive expansion effort to reach $1 billion in assets. The suit cites a “lax loan-approval process” as a main factor behind its demise.
Failed: June 2012
Assets: $533 million
Deposits: $428 million
Buyer: Bluefield, Va.-based First Community Bancshares Inc.
FDIC suit: none
Failed: June 2009
Assets: $970 million
Deposits: $774 million
Buyer: Troy-based First Bank
FDIC suit: filed in August 2011 to recover more than $33 million from its former leaders
Cape Fear Bank
Failed: April 2009
Assets: $492 million
Deposits: $403 million
Buyer: Charleston, S.C.-based First Federal Savings and Loan Association
FDIC suit: filed in April to recover $11.2 million from its former leaders
JAMESVILLE — The Marco Co. will invest $190,000 in a new plant here, creating 100 jobs within three years. The Fort Worth, Texas-based company makes displays for grocery stores and other retailers.
WILMINGTON — Robyn Tomlin, executive editor of the Wilmington StarNews, left to become editor of Thunderdome, which will provide nonlocal content to New York-based Digital First Media’s 75 daily newspapers and more than 300 websites.
BOLIVIA — Brunswick Novant Medical Center named Shelbourn Stevens president. He was its senior director of operations before being tapped as interim president in March. Stevens replaced Denise Mihal, who is now chief operating officer for Winston-Salem-based Novant Health’s Winston-Salem and Eastern markets.
CAMP LEJEUNE — The Intrepid Fallen Heroes Fund has begun work on an $11 million treatment center for service members suffering from traumatic brain injuries and post-traumatic stress. The 25,000-square-foot center is expected to be finished within three years. It will then be given to the Department of Defense.
WILMINGTON — UNC Wilmington Entrepreneurship Center named Fran Scarlett interim director while it searches for a replacement for Jonathan Rowe, who left to join a local technology startup. Scarlett is also director of the regional Small Business & Technology Development Center at the university.