FDIC Issues 56 Enforcement Actions In September

A total of 56 administrative enforcement actions were taken by the FDIC against problem banks in September, up from 53 in August.

The most serious September enforcement actions taken by the FDIC included 10 consent orders, 3 prompt corrective actions and 16 civil money penalties.  Please see the complete list of enforcement actions taken below.

The FDIC publicly issues enforcement actions when a bank has not properly addressed severe capital or operating deficiencies and/or when regulators have limited confidence in the soundness of an institution.  Under Section 38 of the FDIC Improvement Act of 1991, regulators are required to respond to deteriorating capital levels with appropriately severe supervisory actions.  A bank that becomes critically undercapitalized is generally closed by regulators within 90 days.

The most serious regulatory orders issued by the FDIC are listed below.  Of the three banks issued a prompt corrective action notice in September, one has already failed (see All American Bank Closed By Regulators).

A cease and desist order is imposed in an involuntary manner 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.”  Under recent enforcement action nomenclature changes, if the financial institution accepts the FDIC cease and desist order, it is now issued as a “consent order”.

Under a consent order, a bank executes a “Stipulation to the Issuance of a Consent Order” under which a bank has consented to the issuance of the Consent Order “without admitting or denying any charges of unsafe or unsound banking practices or violations of law or regulations relating to weaknesses in asset quality, capital adequacy, earnings, management effectiveness, liquidity, and sensitivity to market risk”.

A prompt corrective action (PCA) directive by the FDIC is a more serious “formal action that requires an institution to take one or more specified actions to return to required minimum capital standards”.  Many of the financial institutions that receive a PCA are unable to comply with the directive and are shortly thereafter closed by regulators.

The number of banks on the FDIC’s confidential Problem Bank List has increased from 76 institutions at December 2007 to 865 at June 30, 2011.

Problem banks have weak capital positions due to operational deficiencies and/or large loan losses. It is likely that most of the banks issued enforcement actions are on the Problem Bank List.

Listed below are the public enforcement actions taken by the FDIC for September 2011.

FINAL ORDERS ISSUED PURSUANT TO SECTION 8(b), 12 U.S.C. § 1818(b)
(Consent Orders)

Americas United Bank, Glendale, CA; FDIC-11-356b; Issued 9/7/11 – PDF

Valley Community Bank, Pleasanton, CA; FDIC-11-528b; Issued 9/23/11 – PDF

The Citizens Bank of Forsyth County, Cumming, GA; FDIC-11-369b; Issued 9/29/11 – PDF

Farmers’ and Traders’ State Bank, Shabbona, IL; FDIC-11-325b; Issued 9/13/11 – PDF

Winfield Community Bank, Winfield, IL; FDIC-11-283b; Issued 9/16/11 – PDF

United Commerce Bank, Bloomington, IN; FDIC-11-390b; Issued 9/12/11 – PDF

Northwest Savings Bank, Warren, PA; FDIC-11-361b; FDIC-11-362k; Issued 8/8/11 – PDF

Community First Bank & Trust, Columbia, TN; FDIC-11-328b; Issued 9/20/11 – PDF

United Central Bank, Garland, TX; FDIC-11-398b; Issued 9/15/11 – PDF

Falcon International Bank, Laredo, TX; FDIC-11-440b; Issued 9/30/11 – PDF

FINAL ORDERS ISSUED PURSUANT TO SECTION 8(e), 12 U.S.C. § 1818(e)
(Removal and Prohibition Orders)

Colonial Bank, Montgomery, AL; FDIC-10-239e; against Catherine Kissick; Issued 9/19/11 – PDF

Colonial Bank, Montgomery, AL; FDIC-11-299e; against Teresa Kelly; Issued 9/15/11 – PDF

First Southern Bank, Batesville, AR; FDIC-11-335e; against Kevin H. Lewis; Issued 9/15/11 – PDF

Tri Counties Bank, Chico, CA; FDIC-11-309e; against Jeremy Taylor; Issued 9/6/11 – PDF

Farmers State Bank of Hoffman, Hoffman, IL; FDIC-10-848e; against Paul E. Finke; Issued 9/15/11 – PDF

North Salem State Bank, North Salem, IN; FDIC-10-957e; against Darren G. Haler; Issued 9/6/11 – PDF

Hastings State Bank, Hastings, NE; FDIC-11-191e; against Jeffrey L. Olson; Issued 9/6/11 – PDF

Branch Banking and Trust, Winston-Salem, NC; FDIC-11-242e; against Erin G. Wilmer; Issued 9/6/11 – PDF

Quality Bank, Fingal, ND; FDIC-10-956e; against Andrew B. Lehr; Issued 9/6/11 – PDF

Congaree State Bank, West Columbia, SC; FDIC-11-208e; against Franklin Harvin Ray, Jr.; Issued 9/6/11 – PDF

Carroll Bank & Trust, Huntingdon, TN; FDIC-11-265e; against Steven G. Nolen; Issued 9/6/11 – PDF

TNBank, Oak Ridge, TN; FDIC-09-528e; against Braxton L. (“Gus”) Sadler; Issued 9/19/11 – PDF

FINAL ORDERS ISSUED PURSUANT TO SECTION 5(e), 12 U.S.C. § 1815(e)
(Cross Guarantee Liability)

Inland Community Bank, N. A., Rialto, CA; Related to Progress Bank of Florida (In Receivership); Tampa, FL; and Gateway Bank, San Francisco, CA; FDIC-11- 421kk; Issued 9/22/11 – PDF

Bank of Feather River; Yuba City, CA; FDIC-11-236kk; Issued 9/16/11 – PDF

Evansville Commerce Bank, Evansville, IN; FDIC-11-068kk; Issued 9/23/11 – PDF

FINAL ORDERS ISSUED PURSUANT TO SECTION 8(i), 12 U.S.C. § 1818(i)
(Civil Money Penalties)

Colorado East Bank & Trust, Lamar, CO; FDIC-11-219k; in the amount of $5,000.00; Issued 9/21/11 – PDF

The Bank of Delmarva, Seaford, DE; FDIC-11-359k; in the amount of $2,700.00; Issued 9/22/11 – PDF

Farmers State Bank of Hoffman, Hoffman, IL FDIC-11-310k; against Paul E. Finke in the amount of $35,000.00; Issued 9/15/11 – PDF

Valley Bank, Moline, IL; FDIC-11-130k; in the amount of $45,000.00; Issued 9/30/11 – PDF

Heritage Bank of Schaumburg, Schaumburg, IL; FDIC-11-230k; in the amount of $6,000.00; Issued 9/29/11 – PDF

MarkleBank, Markle, IN; FDIC-11-202k; in the amount of $82,500.00; Issued 9/9/11- PDF

SSB Bank, Stockbridge MI; FDIC-11-161k; in the amount of $1,050.00; Issued 9/16/11 – PDF

Eastwood Bank, Kasson, MN; FDIC-11-420k; in the amount of $3,695.00; Issued 9/27/11 – PDF

First State Community Bank, Farmington, MO; FDIC-11-447k; in the amount of $13,035.00; Issued 9/22/11 – PDF

Bank Star, Pacific, MO; FDIC-11-448k; in the amount of $4,000.00; Issued 9/22/11 – PDF

Hastings State Bank, Hastings. NE; FDIC-11-192k; against Jeffrey L. Olson in the amount of $25,000.00; Issued 9/6/11 – PDF

The Ohio Valley Bank Company, Gallipolis, OH; FDIC-11-388k; in the amount of $9,600.00; Issued 9/12/11 – PDF

The Wilmington Savings Bank, Wilmington, OH; FDIC-11-116k; in the amount of $900.00; Issued 9/2/11 – PDF

Northwest Savings Bank, Warren, PA; FDIC-11-361b; FDIC-11-362k; Consent Order, Order for Restitution, and Order to Pay in the amount of $325,000.00; Issued 8/8/11 – PDF

GreenBank, Greenville, TN; FDIC-10-802b; in the amount of $132,000.00; Issued 9/2/11 – PDF

Farmers & Merchants Bank & Trust, Marinette, WI; FDIC-11-199k; in the amount of $4,540.00; Issued 9/12/11 – PDF

FINAL ORDERS ISSUED PURSUANT TO SECTION 38, 12 U.S.C. § 1831o
(Prompt Corrective Actions)

ALL American Bank, Des Plaines, IL; FDIC-11-442PCAS; Issued 9/7/11 – PDF

Heartland Bank, Leawood, KS; FDIC-11- 489PCAS; Issued 9/2/11 – PDF

Fidelity Bank, Dearborn, MI; FDIC-11-479PCAS; Issued 9/7/11 – PDF

FINAL ORDERS ISSUED PURSUANT TO SECTION 8(p), 12 U.S.C. § 1818(p)
(Termination of Insurance)

CrediCard National Bank, Tucson, AZ; FDIC-11-184p; Issued 9/29/11 – PDF

Mizuho Corporate Bank of California, Los Angeles, CA; FDIC-11-510p; Issued 9/28/11 – PDF

Bank of Tokyo-Mitsubishi UFJ Trust Company, New York, NY; FDIC-11-511p; Issued 9/28/11 – PDF

TERMINATIONS

Orders Terminating Consent Orders and Cease and Desist Orders

Parkway Bank, Rogers, AR; FDIC-08-128b; Issued 9/28/11 – PDF

Bank of Alameda, Alameda, CA; FDIC-10-546b; Issued 9/20/11 – PDF

Ojai Community Bank, Ojai, CA; FDIC-11-101b; Issued 9/16/11 – PDF

SouthShore Community Bank, Apollo Beach, FL; FDIC-09-672b; Issued 9/21/11 – PDF

The Merchants & Farmers Bank, Melville, LA FDIC-09-367b; Issued 9/16/11 – PDF

Public Savings Bank, Huntingdon Valley, PA; FDIC-11-107b; Issued 9/26/11 – PDF

First Century Bank, Tazewell, TN; FDIC-10-653b; Issued 9/14/11 – PDF

Bank of the Northwest, Bellevue, WA; FDIC-09-712b; Issued 9/1/11 – PDF

West Pointe Bank, Oshkosh, WI; FDIC-09-512b; Issued 9/12/11 – PDF

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