Community & Southern Bank Acquires the Assets and Deposits of Three Georgia Banks from the FDIC

/PRNewswire/ -- Community & Southern Bank has acquired certain assets and deposit accounts and other liabilities of Bank of Ellijay, Ellijay, Georgia, First Commerce Community Bank, Douglasville, Georgia and The Peoples Bank, Winder, Georgia, from the Federal Deposit Insurance Corporation ("FDIC"), as receiver for Bank of Ellijay, First Commerce Community Bank, and The Peoples Bank. Bank of Ellijay, First Commerce Community Bank, and The Peoples Bank were closed by the Georgia Department of Banking and Finance at the close of business on Friday, September 17, 2010, and the FDIC was appointed receiver. Community &Southern Bank will begin operating Bank of Ellijay, First Commerce Community Bank, and The Peoples Bank branch offices as Community & Southern Bank offices immediately.

These are the third, fourth, and fifth acquisitions that Community &Southern has completed. On January 29, 2010, Community & Southern acquired certain assets and deposits of First National Bank of Georgia, Carrollton, Georgia. That acquisition established Community & Southern Bank as one of the market leaders in West Georgia. On March 19, 2010, Community & Southern completed its acquisition of Appalachian Community Bank, Ellijay, Georgia, making Community & Southern the 6th largest Georgia-based bank.

"We're very pleased to announce the acquisition of Bank of Ellijay, First Commerce Community Bank, and The Peoples Bank from the FDIC. The addition of these banks will allow us to serve a wider community throughout Georgia. As we stated previously, our goal is to build a new banking franchise for Georgia, with the strong traditions of service excellence and community support," said Community &Southern Bank's President and Chief Executive Officer, Patrick M. Frawley. "As we integrate these acquisitions, we will first and foremost focus on our customers, our employees, and the communities we serve."

John Spiegel, Chairman of the Board of Directors of Community & Southern Bank and former Chief Financial Officer of SunTrust Bank, added, "The customers of Bank of Ellijay, First Commerce Community Bank, and The Peoples Bank can rest assured knowing that there will be no disruption to the operations and services provided by their bank. Community &Southern Bank looks forward to building upon the traditions and values that are the foundation of our bank. These acquisitions further strengthen our position in our North and West Georgia Regions and establishes us in several new markets in Canton, Winder, and Athens. We welcome all of our new customers into the Community & Southern Bank family as we work to develop the premiere banking franchise across North Georgia."

Bank of Ellijay, First Commerce Community Bank, and The Peoples Bank customers should be aware that their accounts have been automatically converted to Community & Southern Bank accounts. All deposit accounts will continue to be fully insured to the maximum limits allowed by the FDIC. Bank of Ellijay, First Commerce Community Bank, and The Peoples Bank customers should continue to visit existing branches and use their existing checks and ATM/Debit cards to access their funds. All direct deposit and electronic bill pay transactions will continue to be processed normally.

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Community & Southern Bank Acquires the Assets and Deposits of First National Bank of Georgia from the FDIC

/PRNewswire/ -- Community & Southern Bank, a newly formed Georgia state bank, has acquired certain assets and deposit liabilities of the First National Bank of Georgia, Carrollton, Georgia ("First National Bank") from the Federal Deposit Insurance Corporation ("FDIC"), as receiver for First National Bank. First National Bank was closed by the Office of the Comptroller of the Currency at the close of business on Friday, January 29, 2010 and the FDIC was appointed receiver. Community & Southern Bank will begin operating First National Bank's branch offices as Community & Southern Bank offices immediately.

"We're very pleased to announce the acquisition of the First National Bank of Georgia from the FDIC. This is an excellent example of a successful private-public partnership that will save jobs and provide much needed stability to First National Bank customers and the communities it has served for nearly 100 years," said Community & Southern Bank's President and Chief Executive Officer, Patrick M. Frawley. "Following our recently completed capital raise, we are poised to pursue additional opportunities to help with the recovery of the banking system as we strive to create one of the strongest, healthiest, and most well-managed banks in the State of Georgia," added Mr. Frawley.

John Spiegel, Chairman of the Board of Directors of Community & Southern Bank and former Chief Financial Officer of SunTrust Bank, added, "The customers and employees of First National Bank of Georgia can rest assured knowing that there will be no disruption to the operations and services provided by their bank. We look forward to providing our customers with exemplary customer service and meeting all of their banking needs."

First National Bank customers should be aware that their accounts have been automatically converted to Community & Southern Bank accounts at the same rates and terms. All deposit accounts will continue to be fully insured to the maximum limits allowed by the FDIC. First National Bank customers should continue to visit existing branches and use their existing checks and ATM/Debit cards to access their funds. All direct deposit and electronic bill pay transactions will continue to be processed normally. First National Bank customers will be receiving new checks and ATM/Debit cards in the coming weeks.

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Groups Warn of Risk Retention Provision in House Financial Services Bill

/PRNewswire/ -- Following is a Joint Statement on Risk Retention from the Community Mortgage Banking Project and the Community Mortgage Lenders of America:

Late Tuesday evening, the House Financial Services Committee released draft legislation to address systemic risks and "too big to fail" concerns. We appreciate the efforts of the Committee to enact reforms that will ensure that the events that led to the current financial market crisis are not repeated. However, we are deeply concerned that one Subtitle of the just-released draft Financial Stability Improvement Act would have a devastatingly, adverse impact on the secondary mortgage market, forcing community-based lenders to reduce lending or go out of business, which will significantly raise the cost of credit for consumers seeking affordable mortgages.

We are concerned that the broad risk retention provisions in the draft Financial Stability Improvement Act could jeopardize affordable mortgages for consumers by crippling the ability of community-based lenders to tap the secondary mortgage market for funding. This would further accelerate the consolidation of the mortgage market into just a handful of the largest institutions. The result would be reduced competition and choice for consumers - an ironic and counterproductive result for a bill intended to mitigate "too-big-to-fail" concerns.

The draft bill requires all lenders to retain up to ten percent of the credit risk on any loan sold into the secondary market. In addition, entities that acquire mortgages and issue mortgage-backed securities will also be required to retain up to ten percent of the credit risk. The committee's intent is to create incentives for sound underwriting standards and enhanced risk management practices by creditors and issuers of mortgage-backed and asset-backed securities.

However, by setting risk retention requirements at each step of the process from sale to securitization, and layering it over multiple years of originations, the cumulative impact of these requirements on lenders and issuers will reduce liquidity significantly and undermine the ability of the secondary mortgage market to deliver hundreds of billions of dollars of low cost mortgage credit needed each year.

The impact would be particularly severe for local lenders, including independent community mortgage bankers and local banks. Today, these lenders provide consumers with safe and affordable mortgage products, local market knowledge and top quality service. But these companies rely heavily on their ability to sell these loans into the secondary market. Today, these local lenders account for more than 40% of all home mortgage originations, and more than 50% of FHA loans. These companies are critical to our nation's mortgage supply chain, but simply are not structured to retain cumulative layers of credit risk over multiple origination cycles.

Independent mortgage bankers would be forced out of business, while community banks would face liquidity and balance sheet constraints that would sharply limit their lending activities. Even the largest institutions would be constrained in their ability to effectively utilize the attributes of the secondary mortgage market in delivering mortgage funds efficiently.

By contrast, H.R. 1728, which already passed the House earlier this year, addressed the risk retention standards in the mortgage market by establishing standards for "qualified mortgage" products that would be exempt from the risk retention requirements, and would therefore enjoy ample availability in the primary market. Qualified Mortgage products are traditional fixed and adjustable rate mortgages. These plain vanilla products, appropriately underwritten, were not the products that drove the current mortgage market debacle. Other provisions of H.R. 1728 (such as requiring creditors to document income and assets and assess ability-to-pay) help ensure that mortgage lenders utilize strong risk management practices and conduct sound underwriting, but with fewer adverse implications for secondary market liquidity.

There is no need for Congress to chance such a drastic outcome, when a more sensible compromise on this issue was forged in H.R. 1728 and passed earlier this year. The undersigned organizations look forward to working with Congress to achieve its objectives, without potentially disrupting the well-functioning secondary market for safe and affordable traditional mortgages.

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