FDIC Enforcement Actions Issued On 32 Problem Banks – Is Your Bank On This List?

July 30, 2010 – The FDIC today released a list of orders of enforcement actions taken against banks and individuals.   A total of 29 cease and desist consent orders and 3 prompt corrective actions orders were issued.

The Federal Deposit Insurance Corporation, the federal agency in charge of safeguarding the nation’s bank deposits, maintains a confidential Problem Bank List. This list contains the names of institutions that have weak capital positions caused by large loan losses or operational deficiencies that usually lead to failure.  The FDIC does not publicize the list for fear of causing depositor withdrawals and bad publicity which would only serve to hasten the bank’s closing.

As of the latest report released by the FDIC there were 775 problem banks at March 31, 2010 up from 702 at the end of  2009.  Total assets held by the troubled institutions is $431.2  billion, up from $402.8 billion at the end of 2009.

Although the FDIC does not publicize the Problem Bank List, there is another way to determine if a bank is potentially unsafe and subject to closing by regulators.   The FDIC routinely releases a list of banks against which cease and desist and prompt corrective orders are issued.

A cease and desist order is issued when the FDIC has “determined that it had reason to believe that the Bank engaged in unsafe or unsound banking practices and violations of law and/or regulations.”  A prompt corrective action directive by the FDIC is a “formal action that requires an institution to take one or more specified actions to return to required minimum capital standards”.

Although, the FDIC does not publicly disclose the Problem Bank List, it is highly likely that banks  issued cease and desist or prompt corrective actions are on the Problem Bank List.  Banking depositors with balances in excess of the FDIC deposit insurance limit should consider this list as “fair warning” from the FDIC and take their own “prompt corrective action” to avoid potential losses.   Given the serious financial issues cited by the FDIC for the banks listed, expect many of these institutions to wind up on the Failed Bank List.


Community Bank and Trust – Alabama, Union Springs, AL; FDIC-09-722b; Issued 6/9/10 – PDF

GulfSouth Private Bank, Destin, FL; FDIC-10-026b; Issued 6/23/10 – PDF

First Community Bank of Southwest FL, Fort Myers, Florida; FDIC-10-180b; Issued 6/15/10 – PDF

Putnam State Bank, Palatka, FL; FDIC-09-542b; Issued 6/21/10 – PDF

Prosperity Bank, Saint Augustine, FL; FDIC-10-045b; Issued 6/28/10 – PDF

Community Bank of Pickens County, Jasper, GA; FDIC-09-565b; Issued 6/11/10 – PDF

AztecAmerica Bank, Berwyn, IL; FDIC-10-129b; Issued 6/16/10 – PDF

All American Bank, Des Plaines, IL; FDIC-10-158b; Issued 6/21/10 – PDF

Oxford Bank & Trust, Oak Brook, IL; FDIC-09-608b; Issued 6/22/10 – PDF

State Bank of Paw Paw, Illinois, Paw Paw, IL; FDIC-10-294b; Issued 6/24/10 – PDF

Community State Bank, Brook, IN; FDIC-10-353b; Issued 6/11/10 – PDF

Farmers & Merchants Bank & Trust, Burlington, IA; FDIC-10-251b; Issued 6/10/10 – PDF

State Bank of Cokato, Cokato, MN; FDIC-10-212b; Issued 6/1/10 – PDF

VisionBank, Saint Louis Park, MN; FDIC-10-186b; Issued 6/1/10 – PDF

Great Northern Bank, Saint Michael, MN; FDIC-10-213b; Issued 6/18/10 – PDF

Heritage Banking Group, Carthage, MS; FDIC-10-182b; Issued 6/4/10 – PDF

Jefferson Bank and Trust Company, Eureka, MO; FDIC-10-250b; Issued 6/16/10 – PDF

Beartooth Bank, Billings, MT; FDIC-10-351b; Issued 6/10/10 – PDF

Bank of Bozeman, Bozeman, MT; FDIC-10-386b; Issued 6/15/10 – PDF

Bank of North Las Vegas, Las Vegas, NV; FDIC-10-348b; Issued 6/15/10 – PDF

The State Exchange Bank, Lamont, OK; FDIC-10-324b; Issued 6/22/10 – PDF

Firstbank of Puerto Rico, Santurce, PR; FDIC-10-068b; Issued 6/2/10 – PDF

The Palmetto Bank, Laurens, SC; FDIC-10-077b; Issued 6/10/10 – PDF

The Bank of Texas, Devine, TX; FDIC-10-341b; Issued 6/4/10 – PDF

Lone Star Bank, Houston, TX; FDIC-10-259b; Issued 6/10/10 – PDF

Summit Bank, Burlington, WA; FDIC-10-178b; Issued 6/2/10 – PDF

West Pointe Bank, Oshkosh, WI, FDIC-09-512b; Issued 6/17/10 – PDF

Foundations Bank, Pewaukee, WI; FDIC-10-114b; Issued 6/1/10 – PDF

Community First Bank, Rosholt, WI; FDIC-10-272b; Issued 6/4/10 – PDF

(Prompt Corrective Actions)

Coastal Community Bank, Panama City Beach, FL; FDIC-10-467PCAS; Issued 6/24/10 – PDF

North County Bank, Arlington, WA; FDIC-10-431PCAS; Issued 6/24/10 – PDF

The Cowlitz Bank, Longview, WA; FDIC-10-430PCAS; Issued 6/15/10 – PDF

Coastal Community Bank

Consider as an example, the financial condition of Coastal Community Bank, one of the institutions listed above.   Coastal Community Bank, Panama City Beach, Florida, was issued a prompt corrective action and described by the FDIC as being “significantly undercapitalized“.   Coastal Community, a $373 million asset institution, has a troubled asset ratio of 401 compared to a national average of 15.  The vast majority of the failed banks this year had troubled asset ratios of 100% or greater.  Very few banks are able to recapitalize or recover once the level of loan defaults brings the troubled asset ratio over 100%.

Late Update: Coastal Community Bank of Florida was closed by regulators on July 30, 2010.


  1. kevin barquest says:

    During this current economic situation, the FDIC is doing a great justice to the integrity of the banking system by weeding out all of the banks that are not in compliance with the rules and regulations in place to protect the customers using these banks. The downside is there are customers of these banks that are losing a lot of money as their banks are being taken over by the FDIC. At this point, hopefully people are taking the proper steps in protecting themselves, their family, and their finances. People really need to pay attention to whats going on and track their bank status. It should never be a surprise if a bank fails. There is so much notification of what is going on with banks before hand that they have time to prepare to be within the FDIC covered limits. Kevin Barquest Bonney Lake, WA

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