First-Citizens Bank & Trust, a North Carolina-based lender with offices in Folsom, Delaware County and in 18 Southern and Western states, has entered New Jersey, acquiring money-losing Harvest Community Bank's four Salem County offices, and $124 million in the shrunken bank's customer accounts, from the Federal Deposit Insurance Corp. (Update at bottom)
In 2014, Harvest chief executive and cofounder Dennis Engle resigned and the bank was slapped with consent orders to raise more capital by the Federal Deposit Insurance Corp. and the New Jersey Department of Banking and Insurance.
The bank reported its loan loss rate rose from 12% of total loans, to 19%, during that year, and has since remained close to that high level.
An effort to raise new capital in 2015 failed to bring in enough. That April, the bank warned shareholders it faced "some doubt as to our ability to continue as a going concern."
Last October, FDIC gave the bank 90 days "to resolve its issues," the South Jersey Times reported.
According to data from Bloomberg LP, the bank's largest shareholder is Salem County businessman Michael A. Williams, head of the area investors' group that founded and funded Harvest in the early 2000s.
Total Harvest loans -- including home mortgages, business and development loans, and a small proportion of farm loans -- fell to $98 million as of Sept. 30, from $131 million at the end of 2013, while deposits declined to $124 million, from $166 million.
UPDATE 1/17: Some community banks have prospered not far from Harvest. 1st Colonial Community Bank of Collingswood, Camden County, founded in 2000, has since accumulated more than $480 million in loans and other assets, and has been profitable every year since 2001.