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9-28-09 Fed & State Regulators take enforcement action with local Oconee County Banks

……The government restrictions also call for the banks' boards of directors to have greater involvement and oversight of day-to-day operations. Athens Banner-Herald 9-26-09

AVOC

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September 27, 2009

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Fed & State Regulators take enforcement action with local Oconee County Banks

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By Wendell Dawson, Editor, AVOC, Inc

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It seems the housing bubble and crash has significantly impacted two of our locally owned Oconee County Banks.   Federal and State Regulatory agencies have imposed ‘Cease and Desist’ orders on the Oconee State Bank and North Georgia Bank.

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There have been media reports in the Athens Banner-Herald, Atlanta Journal-Constitution and the Atlanta Business Chronicle.    Oconee State Bank advised its stockholders of its order by a Letter to the Stockholders dated September 17, 2009.

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The enforcement action for both banks can be viewed online.   It is a very serious matter.   Local stockholders will not be receiving dividends in the near future and may have little value in their stock holdings.

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The Cease and Desist orders are available online and published reports can be found at the following links:

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1.             North Georgia Bank Enforcement Order: July 14, 2009

http://www.federalreserve.gov/newsevents/press/enforcement/enf20090720a1.pdf

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2.         Oconee State Bank -FDIC Enforcement Order August 18, 2009

http://www.fdic.gov/bank/individual/enforcement/2009-08-09.pdf

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3.         Bank Star Ratings for Oconee Area Institutions 8-29-09.pdf x

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The Athens Banner-Herald

http://www.onlineathens.com/stories/092609/new_497515166.shtml

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September 26, 2009

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Banks must rein in bad loans

Under FDIC cease-and-desist orders

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By Don Nelson

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Two Oconee County banks are operating under cease-and-desist orders issued by federal and state regulators ……….

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The Federal Deposit and Insurance Corp. and the state Department of Banking and Finance issued orders to Oconee State Bank last month and North Georgia Bank in April.

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The sanctions do not prohibit the North Georgia or Oconee State from conducting normal business, a state banking official said.

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"Banks can and do continue to operate once they receive those (cease-and-desist orders)," banking department Commissioner Rob Braswell said.

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The orders primarily call for the banks to reduce their "nonperforming" loans - loans on which customers have fallen behind on repayments, said bank Presidents Amrey Harden of Oconee State and Chuck Williams of North Georgia.

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The government restrictions also call for the banks' boards of directors to have greater involvement and oversight of day-to-day operations.

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The orders require the banks to provide the FDIC and the state Banking Department a written plan……….


The Atlanta Journal-Constitution

http://www.ajc.com/business/georgian-bank-four-others-146973.html?cxtype=rss_news_81963

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September 26, 2009

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Georgian Bank, four others in state, rapped by regulators

The 5 were served with 'cease and desist' orders requiring them to raise capital levels

 

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By Paul Donsky

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Federal regulators have cracked down on five more troubled Georgia banks, including Atlanta-based Georgian Bank, one of the state’s largest community banks.

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Georgian is one of four banks in the state served with “cease and desist” orders in August requiring them to raise capital levels and make other changes to shore up their institutions. The orders were made public on Friday.

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The other banks served with such orders are: Providence Bank, Alpharetta; Gwinnett Community Bank, Duluth; and Oconee State Bank, Watkinsville………………………


Atlanta Business Chronicle

http://atlanta.bizjournals.com/atlanta/stories/2009/09/21/daily98.html?page=1

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September 25, 2009

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Georgian Bank, 4 others issued regulatory censures

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by J. Scott Trubey

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Federal bank regulators Friday published strict enforcement orders against five Georgia community banks, including embattled Atlanta-based Georgian Bank.

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The Federal Deposit Insurance Corp. made public Cease & Desist orders entered into with Georgian, Providence Bank of Alpharetta, Gwinnett Community Bank of Duluth and Oconee State Bank

of Watkinsville.

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Cease & Desist orders are strong formal censure agreements between regulators and a troubled bank. Under the orders, banks must undergo a significant overhaul to satisfy regulators and potentially avoid seizure. Since the banking crisis began, dozens of Georgia banks have received Cease & Desist orders from regulators, often following a regulatory exam.

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Such orders have accelerated from state and federal regulators as the banking crisis has intensified. Georgia leads the nation with 23 bank failures since August 2008.

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The orders, in general, call for improved board oversight, restoration and/or maintenance of sufficient capital, improved liquidity and funds management practices, and improved loan underwriting, administration and portfolio management.

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Real estate losses have been primary contributors to the woes of many Georgia banks…….



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