FDIC Issues 60 Enforcement Actions To Problem Banks In February

The FDIC issued 60 enforcement actions against problem banks in February, down slightly from 61 in January.  Among the more serious administrative enforcement actions processed were 22 consent orders, 13 civil money penalties and 7 prompt corrective actions.

The FDIC and other regulators use enforcement actions to address serious deficiencies and when there is regulatory doubt in an institution’s ability to implement required corrective actions.  Critically undercapitalized institutions are generally required to be closed within 90 days.

A Cease and Desist Order, if accepted by the financial institution, is referred to as a “consent order”.   A cease and desist order is issued when regulators have “determined that it had reason to believe that the Bank engaged in unsafe or unsound banking practices and violations of law and/or regulations.”

When a bank “consents” to a regulatory order, the bank will execute a “Stipulation to the Issuance of a Consent Order”.  The consent agreement allows the bank to agree with regulatory stipulations “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 much more serious enforcement action is the prompt corrective action (PCA) directive which is a “formal action that requires an institution to take one or more specified actions to return to required minimum capital standards”.  Often times, an institution cannot comply with the terms of a PCA and a high percentage of banks issued PCAs wind up failing.

The number of banks on the FDIC’s Problem Bank List represent over 12% of all FDIC insured institutions.  The latest Quarterly Bank Profile revealed that the number of problem banks had increased from 860 to 884.

Given the serious deficiencies cited in the regulatory enforcement actions issued, many of the banks receiving consent orders or prompt corrective actions are likely to wind up on the failed bank list.

(Consent Orders)

First Financial Bank, Bessemer, AL; FDIC-10-831b; Issued 2/17/11 – PDF

Home Bank of Arkansas, Portland, AR; FDIC-10-805b; Issued 2/22/11 – PDF

Open Bank, Los Angeles, CA; FDIC-11-062b; Issued 2/16/11 – PDF

Savings Bank of Mendocino County, Ukiah, CA; FDIC-10-887b; Issued 2/4/11 – PDF

Georgia Banking Company, Atlanta, GA; FDIC-10-490b; Issued 2/1/11 – PDF

F & M Bank and Trust Company, Manchester, GA; FDIC-10-873b; Issued 2/4/11 – PDF

Country Bank, Aledo, IL; FDIC-10-864b; Issued 2/3/11 – PDF

Bridgeview Bank Group, Bridgeview, IL; FDIC-10-853b; Issued 2/10/11 – PDF

New City Bank, Chicago, IL; FDIC-11-033b; Issued 2/24/11 – PDF

Community Bank-Wheaton/Glen Ellyn, Glen Ellyn, IL; FDIC-10-713b; Issued 2/7/11 – PDF

Bank of Palatine, Palatine, IL; FDIC-10-780b; Issued 2/10/11 – PDF

State Bank, Wonder Lake, IL; FDIC-10-821b; Issued 2/7/11 – PDF

Bluegrass Community Bank, Danville, KY; FDIC-10-279b; Issued 2/15/11 – PDF

Northern Star Bank, Mankato, MN; FDIC-10-738b; Issued 2/28/11 – PDF

Reliance Bank, Des Peres, MO; FDIC-10-947b; Issued 2/14/11 – PDF

Bank of George, Las Vegas, NV; FDIC-10-940b; Issued 2/1/11 – PDF

Southern Community Bank and Trust, Winston-Salem, NC; FDIC-10-823b; Issued 2/25/11 – PDF

Columbia Savings Bank, Cincinnati, OH; FDIC-10-958b; Issued 2/24/11 – PDF

Horry County State Bank, Loris, SC; FDIC-10-822b; Issued 2/10/11 – PDF

Brighton Bank, Brighton, TN; FDIC-10-515b; Issued 2/23/11 – PDF

Citizens Bank of Spencer, Tenn., Spencer, TN; FDIC-10-651b; Issued 1/28/11 – PDF

Citizens State Bank, Somerville, TX; FDIC-10-962b; Issued 2/15/11 – PDF

(Civil Money Penalties)

Bank of Cave City, Cave City, AR; FDIC-10-841k; in the amount of $2,310.00; Issued 2/17/11 – PDF

Diamond Bank, Murfreesboro, AR; FDIC-10-960k; in the amount of $7,000.00; Issued 2/24/11 – PDF

Suncrest Bank, Visalia, CA; FDIC-11-073k; in the amount of $3,400.00; Issued 2/23/11 – PDF

Artisans’ Bank, Wilmington, DE; FDIC-10-753k; in the amount of $4,000.00; Issued 2/7/11 – PDF

The Bank of Commerce, Ammon, ID; FDIC-10-726e; FDIC-10-727k; against Steven E. Worton in the amount of $10,000.00; Issued 2/17/11 – PDF

Farmers State Bank of Danforth, Danforth, IL; FDIC-10-886k; against Gerry L. Lunt in the amount of $5,000.00; Issued 2/24/11 – PDF

Excel Bank, Sedalia, MO; FDIC-10-881k; in the amount of $12,000.00; Issued 2/10/11 – PDF

Excel Bank, Sedalia, MO; FDIC-10-882k; in the amount of $7,500.00; Issued 2/9/11 – PDF

Integrity Bank, Camp Hill, PA; FDIC-10-755k; in the amount of $9,000.00; Issued 2/1/11 – PDF

VIST Bank, Wyomissing, PA; FDIC-10-754k; in the amount of $9,000.00; Issued 1/28/11 – PDF

Fox River State Bank, Burlington, WI; FDIC-10-761k; in the amount of $5,050.00; Issued 2/17/11 – PDF

Nekoosa Port Edwards State Bank, Nekoosa, WI; FDIC-10-920k; in the amount of $3,700.00; Issued 2/15/11 – PDF

(Prompt Corrective Actions)

Central Arizona Bank, Casa Grande, AZ; FDIC-11-011PCAS; Issued 2/22/11 – PDF

Sunrise Bank of Arizona, Phoenix, AZ; FDIC-11-010PCAS; Issued 2/22/11 – PDF

Summit Bank, Prescott, AZ; FDIC-11-063PCAS; Issued 2/10/11 – PDF

Michigan Commerce Bank, Ann Arbor, MI; FDIC-11-014PCAS; Issued 2/22/11 – PDF

Bank of Las Vegas, Las Vegas, NV; FDIC-11-015PCAS; Issued 2/22/11 – PDF

The Village Bank, Saint George, UT; FDIC-11-110PCAS; Issued 2/22/11 – PDF

First Heritage Bank, Snohomish, WA; FDIC-11-111PCAS; Issued 2/24/11 – PDF

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