From The The Charleston Gazette

Clay County Bank chief retires after 15 years

By Scott Finn

Tuesday May 21, 2002
J.D. Morris, the president of the Clay County Bank for 15 years, retired late last month because "he just got tired of working," according to the new interim president.

The retirement came in the same month that the FDIC released a report saying the bank lost $264,000 in the last quarter of 2001. That's the fifth-biggest loss of any bank in the state.

The loss had nothing to do with Morris' retirement, said Scott Legg, the bank's interim president. Morris, 67, had been planning to retire for some time, he said. He wanted to spend more time with his ailing mother and enjoy his newly constructed home.

"He wanted to enjoy sitting on porch, drinking coffee and watching the sun come up of the morning," Legg said.

Morris also serves on the state Board of Education and the School Building Authority. He plans to stay on both boards, according to a May 1 article in the Clay County Free Press. Morris could not be reached for comment Monday.

State officials also examined the bank last month, Legg said. He called the examination routine.

Bank officials set aside more than $1 million last year in the bank's "loan loss allowance" to cover potential bad loans. That's almost twice as much as they set aside the year before, and it hurt the bank's profits.

The bank had more than twice as many "charge offs" as it had the year before — a total of 589. Those are loans that may never get paid.

Legg said the charge-off figures are not unusual for a bank of Clay County's size, with assets of $64 million.

"We set that money aside as a contingency," he said. "It is not money lost; it is money that could potentially be lost."

At the same time, the bank increased what it paid for salaries and benefits for its 24 employees by 7 percent, from $980,000 to more than $1,050,000. That's higher than nine of 10 state banks with similar assets.

Two bank analysts said that Clay County Bank is in sound financial condition, but that customers may want to keep an eye on the bank in the next few months.

Weiss Ratings Inc. of Palm Beach Gardens, Fla., downgraded the bank from B- to C last month, said analyst David Proko.

Proko said that for a small bank, Clay County Bank has set aside good capital to absorb these losses.

"Still, small banks are by their nature are more prone to sudden downfalls," he said. "A few bad loans could really hurt their business."

The Massachusetts company Veribanc downgraded the bank from green with three stars to yellow with two stars last month, according to bank analyst Mike Heller.

That's a "cautionary rating," he said. The yellow color refers to the loss last quarter, but the two stars indicate a relatively positive long-term forecast, he said.

Legg said that customers and bank investors can expect profits in the first quarter of this year and for the entire year. For all of last year, the bank lost $87,000.

"All businesses have better years than others sometimes," he said.

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