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Cooperative Bank took many missteps, report says

Risky coastal developments helped spell the end for Cooperative Bankshares.

The Wilmington bank, which failed in June, didn't closely scrutinize borrowers and didn't follow through when examiners suggested changes, the Charlotte Observer reports, citing a regulatory review released today.

The Federal Deposit Insurance Corp., which released the report, also took some of the blame for Cooperative's failure. Though its examiners began raising questions as early as 2004, asking whether the bank's internal audit team was understaffed, the FDIC acknowledged that firmer action on its part “may have been prudent.”

Cooperative was the second N.C.-based bank to fail in the current crisis. The other, Cape Fear Bank, was also based in Wilmington and also hurt by its concentration in coastal development.

Cooperative, founded in 1898, had about two dozen branches stretching from the Outer Banks to Myrtle Beach.

First Citizens buys another West Coast bank

First Citizens Bank is taking advantage of buying opportunities created by the recession to bulk up on the West Coast.

The Raleigh-based bank late Friday announced that it agreed to buy Venture Bank, a Lacey, Wash., lender with 18 branches in the Puget Sound area. That includes Redmond, Wash., home of Microsoft.

The deal was brokered by the Federal Deposit Insurance Corp. and Washington state regulators after Venture Bank failed.

Regulators have seized and closed 92 U.S. banks this year, as the economic downturn, housing slump and credit crisis continue to create casualties among weaker lenders.

That's allowing stronger companies like First Citizens to step in and expand their operations.

BB&T to buy failed Alabama bank

BB&T, the regional bank based in Winston-Salem, agreed to take over branches and deposits of Colonial BancGroup, after the Alabama bank was shut down by regulators.

Colonial Bank's 346 branches in Alabama, Florida, Georgia, Nevada and Texas will reopen under normal business hours beginning tomorrow and operate as branches of BB&T, the Federal Deposit Insurance Corp. announced tonight.

BB&T reportedly in deal to buy Colonial

Tags: .biz | banking | BB&T | Colonial | FDIC

BB&T, the regional bank based in Winston-Salem, has reached a deal to take over offices and deposits of Colonial BancGroup, according to published reports.

Colonial, based in Alabama, is expected to be closed by federal banking regulators later today, Bloomberg News and the Wall Street Journal reported, citing people familiar with the matter.

First Citizens reports weaker 2nd-Qtr profit

Profit took a big hit at First Citizens BancShares in the second quarter, as higher regulatory fees and the recession hurt business at the Raleigh-based bank.

Earnings dropped to $6.2 million, down 76 percent from the same quarter last year, the company reported this afternoon.

Losses on residential and other types of loans rose, while interest income declined. The company also paid more in fees to the Federal Deposit Insurance Corp., which is charging banks more to cover spreading bank failures.

Including 11 branches in California bought this month in an FDIC-brokered deal, First Citizens now has more than 400 branches. The company has total assets of $17.3 billion.

First Citizens shares rose $4.84 today to close at $140. The stock is down 8 percent this year.

Four Oaks Bank expects loss

The corporate parent of Four Oaks Bank & Trust said today that it expects to lose money in the second quarter and raised the possibility of cutting its dividend.

But Ayden R. Lee Jr., CEO of the Johnston County-based bank, anticipates “a quick return to profitability.” Nancy Wise, the bank’s chief financial officer, said in an interview that the bank could become profitable as soon as the third quarter.

“We’re very optimistic,” Wise said. “Basically, what we’re looking at is a one-time event.”

Meanwhile, the bank also said it is taking steps to “maintain our solid capital base.”

The bank, which has 17 branches in eight North Carolina counties, said it expects its second-quarter loss will range between $1 million and $1.5 million. Its earnings will drop into the red because of a boost in its provision for loan losses and higher payments to the Federal Deposit Insurance Corp.

FDIC shuts Wilmington's Cooperative Bank

Federal regulators on Friday shut down a Wilmington bank with 24 branches along the Carolinas coast, making it the second North Carolina bank seized this year.

The Federal Deposit Insurance Corp. was appointed receiver of Cooperative Bank of Wilmington. First Bank of Troy, N.C., will take over the failed bank’s 24 branches in places such as Morehead City, Wrightsville Beach and elsewhere, and $774 million in deposits.

Along with another small bank in Fayetteville, Ga., that the FDIC closed on Friday, the national tally of failed banks this year has climbed to 39.

In April, the FDIC took over Wilmington-based Cape Fear Bank’s eight branches. The wave of bank failures is expected to continue as the weak housing market and rising unemployment rate cause more borrowers to default on their loans.

Cooperative Bank officials couldn’t be reached for comment late Friday. The bank was chartered in 1898, according to its Web site.

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