• February 27, 2015

First Cherokee State Bank shutters, Community & Southern takes over

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Posted: Wednesday, July 25, 2012 12:00 am

The effects of recession linger still in Cherokee County, as it lost another local bank to failure on Friday, when the Georgia Department of Banking and Finance closed First Cherokee State Bank, headquartered in Woodstock. Regulators have closed three banks headquartered in Woodstock since the construction market stalled, along with several others that operated branches in the county.

State regulators appointed the Federal Deposit Insurance Corporation (FDIC) as receiver of the bank. To protect depositors, FDIC entered into a purchase and assumption agreement with Community & Southern Bank (CSB), based in Atlanta, to assume all of the deposits of First Cherokee State Bank.

The three branches of First Cherokee State Bank, located in Woodstock, Marietta and Canton, have reopened as branches of Community & Southern Bank.

Depositors of First Cherokee State Bank will automatically become depositors of Community & Southern Bank. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits. Customers of First Cherokee State Bank should continue to use their existing branch until they receive notice from Community & Southern Bank that it has completed system changes to allow other Community & Southern Bank branches to process their accounts, as well.

At the same time as the takeover of First Cherokee State Bank, the Georgia Department of Banking and Finance closed Georgia Trust Bank, headquartered in Buford.  In connection with each transaction, CSB also entered into a loss sharing agreement with the FDIC.

“We are pleased to announce our acquisition of First Cherokee State Bank and Georgia Trust Bank, further extending Community & Southern’s footprint in Cobb, Cherokee and Gwinnett counties – three of the most dynamic counties in the state of Georgia,” said Pat Frawley, chief executive officer of CSB.  “We look forward to serving our new customers with the same enhanced products, customer service and community support that current CSB customers have come to expect.  We will work our hardest to make the transition for First Cherokee and Georgia Trust customers as smooth as possible.”

Community & Southern spokesman Mike Griggs said Monday Acru financial services, a subsidiary of First Cherokee that offers financial services and operates Copper Coin coffeehouse in Woodstock Downtown, will remain open. Additionally, Griggs said, First Cherokee State Bank management and employees remain in place during the transition.

“At Acru, we are proud of our heritage with First Cherokee State Bank and everything they accomplished for our local community,” said Acru Managing Director Brad Nix. “We are also excited about the future opportunities in working with Community & Southern Bank.”


As of March 31, First Cherokee State Bank reported total assets of approximately $223 million and total deposits of approximately $220 million, and Georgia Trust Bank reported total assets of approximately $120 million and total deposits of approximately $118 million.

Community & Southern Bank will pay the FDIC a premium of 0.5 percent to assume all of the deposits of First Cherokee State Bank. In addition to assuming all of the deposits of the failed bank, Community & Southern Bank agreed to purchase essentially all of the failed bank’s assets.

The FDIC and Community & Southern Bank entered into a loss-share transaction on $141.8 million of First Cherokee State Bank’s assets. Community & Southern Bank will share in the losses on the asset pools covered under the loss-share agreement. The loss-share transaction is projected to maximize returns on the assets covered by keeping them in the private sector. The transaction also is expected to minimize disruptions for loan customers.

Since its inception on Jan. 29, 2010, CSB has acquired the assets and deposits of seven banks from the FDIC. Currently, CSB operates 38 branches in metropolitan Atlanta and across Georgia’s northern, eastern and western counties and has more than $2.6 billion in assets.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $36.9 million. Compared to other alternatives, Community & Southern Bank’s acquisition was the least costly resolution for the FDIC’s DIF. First Cherokee State Bank is the 36th FDIC-insured institution to fail in the nation this year, and the eighth in Georgia.

For more information, visit the FDIC’s Web site at www.fdic.gov/bank/individual/failed/cherokee.html.

All acquired branch offices will open during their normal days and hours, including those branches with Saturday hours.  Customers of First Cherokee State Bank and Georgia Trust Bank should continue to use their existing branches, checks, ATMs, debit cards and online banking services.  If customers have any questions regarding their accounts involved in this transaction, they should contact their local branch.

For more information, contact CSB at 1(800) 901-8075 or visit www.mycsbonline.com.


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