Bank cleared from FDIC order
A bank in western North Carolina whose parent company is based in the Triad has been cleared by a federal regulator after it was cited three and a half years ago for unsound financial practices.
The Bank of Granite, based in the town of Granite Falls in the foothills just north of Hickory, was released from a cease and desist order by the Federal Deposit Insurance Corp. earlier this week, the bank announced Friday. The parent holding company of Bank of Granite is Asheboro-based FNB United Corp. In October 2011, a merger took place between Bank of Granite Corp. and FNB United Corp., parent of CommunityOne Bank.
In a 17-page order from August 2009, the FDIC issued a cease and desist order against Bank of Granite for an array of unsound practices. Bank of Granite consented to the order, according to the FDIC document.
The unsound practices cited by the main federal agency overseeing U.S. banks included inadequate equity capital to cover loan volume and financial assets, holding a large pool of poor quality loans, operating with an inadequate loan policy and having a board of directors “that has failed to provide adequate supervision over and direction to the management of the bank.”
The withdrawal of the cease and desist order by the FDIC reflects the progress of the bank, said Brian Simpson, chief executive officer of Bank of Granite and FNB United.
“Our entire organization has been working hard to restore the bank to a solid position, and we will continue to adhere to the policies, procedures and processes we put in place to reduce problem assets, improve asset quality and enhance bank operations,” Simpson said.
Since acquiring Bank of Granite, FNB United has provided $55 million in new capital to stabilize the bank, said Bob Reid,
president of Bank of Granite and FNB United.
Both banks under FNB United were founded more than 100 years ago in North Carolina. Bank of Granite operates 17 branches in seven North Carolina counties primarily in western North Carolina. CommunityOne operates 44 branches in 37 communities throughout central, southern and western North Carolina.
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