First Federal Savings and Loan Association of Charleston is taking over the deposits and loans of Cape Fear Bank, a Wilmington, North Carolina, lender that regulators closed today.
The North Carolina Office of the Commissioner of Banks closed Cape Fear Bank and named the Federal Deposit Insurance Corp. as receiver, according to the FDIC. First Federal, a subsidiary of First Financial Holdings Inc., agreed with the FDIC to assume all of the failed bank’s deposits, excluding most brokered deposits, and certain of its assets, First Federal said.
Cape Fear Bank’s eight Wilmington-area offices will reopen Monday as First Federal branches. Its depositors automatically become First Federal depositors, and their money remains insured by the FDIC, the company said.
“Customers can be confident that their deposits are safe and readily accessible. It’s business as usual,” said A. Thomas Hood, First Federal’s president and CEO.
First Federal said it will take on about $300 million in deposits, $380 million in loans and $4 million in foreclosed real estate. It is acquiring the assets at a $74 million discount and paying a 1% premium on the deposits.
The FDIC will share the risk. Under a loss-share agreement, it will cover 80% of losses on the acquired loans and foreclosed property up to $110 million, and 95% of losses above that, First Federal said.
The deal gives First Federal 66 offices in North and South Carolina and carries it from Brunswick County into New Hanover and Pender counties in coastal North Carolina. First Financial had $3 billion in assets at the end of 2008.
In December, First Financial sold $65 million in preferred stock to the U.S. Treasury. Hood said then that the capital would add flexibility for “strategic opportunities that likely will be available to us as the financial services industry consolidates.”
