Business: Troubled Plantation Federal sold by feds
Plantation Federal Bank, Pawleys Island’s first home-grown bank, closed Friday for the last time. It reopened Monday as First Federal of Charleston.
The Office of the Comptroller of the Currency announced Friday it had appointed the Federal Deposit Insurance Corporation as receiver for Plantation Federal Bank. That was followed by an announcement from First Financial Holdings that it has agreed to buy the troubled Pawleys Island bank effective with the close of business Friday.
In a conference call with investors on Monday, First Financial officials said no additional capital was required to make the purchase.
Plantation Federal opened in 1986 at Pawleys Island and expanded to include branches in Murrells Inlet, Georgetown and Myrtle Beach. It later entered into a deal to buy First Savers Bank in Greenville.
In April 2009, the federal Office of Thrift Supervision entered into a supervisory agreement with the bank citing regulatory violations and inadequate risk management. The agreement required the bank to submit business plans for the agency's review through the first half of this year.
As of December 31, 2011, the Plantation Federal had approximately $486.4 million in total assets.
The Comptroller of the Currency acted after finding that Plantation Federal had experienced substantial dissipation of assets and earnings due to unsafe and unsound practices. The agency said it also found that the institution is likely to incur losses that will deplete its capital, the institution is critically undercapitalized and there is no reasonable prospect that the institution will become adequately capitalized without federal assistance.
First Financial Holdings, owner of First Federal of Charleston, acquired $348.6 million in loans and $440.5 million in deposits.
"We are excited to welcome our new customers and associates to First Federal," said R. Wayne Hall, president and chief executive officer of First Federal. "The customer base of Plantation Federal and First Savers was a significant attraction to our company in considering this transaction. This is strategically beneficial to First Federal as we enter the Greenville market and expand our current presence in the Grand Strand market, which includes Pawleys Island, Murrells Inlet and Myrtle Beach. Our knowledge and familiarity with these communities will facilitate a smooth integration which will in turn allow us to focus on what we do best - providing our customers with the highest level of service, competitive products, and sound banking." First Federal already has a branch in Litchfield.
Plantation Federal will operate as First Federal Bank financial centers. Depositors will automatically become depositors of First Federal and their deposits continue to be insured by the FDIC.