By John Schaffner

Veteran Buckhead banking executive and Brookhaven resident Joe Evans enhanced the metro Atlanta area holdings of his State Bank and Trust company Dec. 4 with the purchase of the failed Buckhead Community Bank and its six branches, including Sandy Springs Community Bank.

Buckhead Community Bank was the first recent failure of a Buckhead-area based bank.

“We saw it coming weeks and months ago as more and more of the loans were in serious trouble,” said Charles Loudermilk, the founder and chairman of the board of the Buckhead Community Bank. “We didn’t see a way of working out of it and the FDIC [Federal Deposit Insurance Corporation] didn’t either. It generally was just the economy and having too many loans in the wrong industry—real estate—at the wrong time.”

Loudermilk said the FDIC saw no problem in the way the bank was being run. “I asked the FDIC people just days ago ‘If we didn’t have this recession, would be sitting around this table’ “They said no,” Loudermilk told Reporter Newspapers during a phone interview Dec. 7.

Loudermilk, who personally lost more than $3 million in the fall of the Buckhead Community Bank, had just gotten off the phone with Evans, CEO of Macon-based State Bank and Trust, before talking to the Reporter. Loudermilk called Evans a “very smart banker.”

Until recently, State Bank and Trust was one of Georgia’s smallest lenders. But it was acquired last summer by an investment team led by veteran Georgia banker Evans, who raised nearly $300 million to take over Security Bank of Macon, which failed in July. Evans had said he would use much of the $300 million to acquire failed banks.

With the acquisitions of Buckhead Community Bank, as well as First Security National Bank of Norcross, on Dec. 4, State Bank and Trust becomes Georgia’s fourth largest bank, with more than $2.8 billion in assets throughout Georgia and $1 billion in assets in Atlanta.

Buckhead Community Bank was launched in 1998 by Loudermilk, founder of Buckhead-based Aaron’s Inc., and grew quickly during the real estate boom. But the bank lost $60 million this year, and ended the third quarter with just $8.6 million left in capital and nearly $150 million in “severely troubled” loans. Its leaders were unable to raise capital to save the bank in recent months.

Loudermilk said he met with Evans a couple of years ago and Evans wanted to buy or merge with the Buckhead bank at that time. But the bank “was doing real well at the time and it never went anywhere.”

The economy and real estate loans are what hurt Buckhead Community Bank Loudermilk said, the stock of which at one time was selling for $30 per share, he added.

State Bank and Trust Atlanta Division President Steven Deaton, who has been an Atlanta banker for about 25 years, said the acquisition “fits very nicely with our vision and truly our mission, which is to be the most significant super community bank in Georgia.”

He said they are in the “process of assessing which branches we might keep open and which ones might close.” In addition to the Buckhead branch, Buckhead Community Bank also has had branches in Sandy Springs, Midtown, Cobb County, Forsyth County and Gainesville, Ga.

“The branches will all be run as a community bank type franchise, but all of our offices are under the flag of State Bank and Trust,” Deaton said.

“We don’t know about the winning of the bid on transactions like this until a couple of days before we have to take possession of the bank,” he added, “so there presently are bags over the signs at the branches (indicating the new ownership). The temporary signs are going up as soon as we can get the contractors outto get our name on the buildings until the final signs can be put up.”

Asked if the Buckhead Bank’s senior management would be retained, Deaton said, “We are in the process right now of assessing who wants to go forward with us and then what makes sense for the bank going forward. We will not be making any of those hard decisions for the first 30 days or so.”

“What we are trying to do now is serve the clients and make sure all of our existing clients come first and foremost,” he explained. “Then we will really work on the human resources side to make sure we put the right people in the right positions to really grow the franchise in Atlanta.”