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Material Loss Review Of Buckhead Community Bank, Atlanta, GA

Sunday, June 20, 2010 - 11:32 AM
Buckhead Community Bank in Georgia was closed by regulators on December 4, 2009. The FDIC Office of Inspector General completed its Material Loss Review last week. Below is an excerpt:

Buckhead failed because the bank’s Board and management did not implement adequate controls to identify, measure, monitor, and control the risks associated with the bank’s significant ADC concentration. Further, Buckhead relied on potentially volatile non-core liabilities such as higher-priced certificates of deposit, including brokered deposits, to fund loan growth. Weaknesses in the bank’s loan underwriting and credit administration practices, exacerbated by the precipitous economic decline in the Atlanta metropolitan real estate market that began in 2007, led to ADC loan losses that eroded the bank’s earnings and capital and an inadequate Allowance for Loan and Lease Losses (ALLL). Buckhead was unable to raise sufficient capital to support its operations or find a suitable acquirer. Ultimately, Buckhead’s capital position became Critically Undercapitalized for PCA purposes and the DBF determined that the bank was not viable and closed the institution in December 2009.

Link to Material Loss Review (pdf)

Link to review of Buckhead's failure
Ken TuminKen Tumin5,473 posts since
Nov 29, 2009
Rep Points: 125,800