Fidelity Bank Chairman James B. Miller said Monday bad real estate loans in Morgan and Oconee County led to the downfall of Decatur First Bank, which Fidelity acquired last Friday.
"The bulk of the problem was outside of DeKalb County," Miller said.
Besides having two branches in Decatur, Decatur First operated the Bank of Morgan County in Madison and as Lake Oconee Community Bank at Lake Oconee, but Miller said "they're really just branches of Decatur First."
Miller said those branches made loans for houses at places such as Reynolds Plantation, which was hurt badly by the econmomic downturn.
An Atlanta Journal-Constitution story earlier this year described the problems of the luxury home market there.
Miller said Decatur and surronding areas such as Druid Hills were not a significant part of the problem. In Decatur, Decatur First had two branches – the main office at 1120 Commerce Drive and a kiosk inside the Kroger grocery store. The main Decatur First office is less than a block from the Fidelity Bank building at Commerce and Church streets.
All the branches were operating normally Monday, bank officials said.
The FDIC said that as of June 30, Decatur First Bank had approximately $191.5 million in total assets and $179.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, Fidelity Bank agreed to purchase essentially all of the assets.
The problems of the bank -- the 21st banking failure in Georgia -- are charted on problembanklist.com, pointed out by local blog nDecatur.com.
Fidelity Bank President Palmer Proctor said Monday morning that bank officials are deciding whether any newly acquired offices will be closed or employees laid off.
“We’re still evaluating that right now,” he said. “This our first day in. … We are interviewing all the employees right now to decide what we need to do.”
Proctor said Decatur First Bank had about 35 employees.
For customers, the transition should be “seamless” because Fidelity is a community bank that’s actually been in Decatur longer than Decatur First Bank, Proctor said. Some Decatur First customers are already starting to make transactions in Fidelity branches, he said.
“Most people are relieved it was Fidelity Bank than some out-of-state bank,” he said.
The Decatur First Bank website simply has a statement that Fidelity Bank has taken over. Links connect to Decatur First’s login and an FDIC information page about the bank closure.
Proctor said this is Fidelity's first FDIC-assisted acquisition of a bank.
"We're excited about the opportunity," he said.
He said customers seemed excited about having more branches and a larger product offering.