FDIC Issues 57 Enforcement Actions Against Problem Banks In May

The FDIC issued 57 enforcement actions in May against various banks and individuals, down from 76 in April.  Among the enforcement actions issued were 10 consent orders, 11 civil money penalties, 1 prompt corrective action and 13 orders terminating consent orders.

As explained in previous posts, various enforcement actions are taken depending on the severity of regulatory action deemed necessary.

Regulators use enforcement actions when regulators have doubts about the ability of an institution to implement required corrective action or to address serious operating and financial deficiencies.  The FDIC is required to close critically undercapitalized institutions within 90 days.

A consent order is the term used when a financial institution accepts a Cease and Desist Order.  Typically, regulators will issue a Cease and Desist Order when they 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.”

After a bank “consents” to a regulatory action, it will execute a “Stipulation to the Issuance of a Consent Order”.  A bank that agrees to regulatory actions through a consent agreement are allowed to accept regulatory findings and orders “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) is much more serious than a consent order and is a “formal action that requires an institution to take one or more specified actions to return to minimum capital standards”.  A large percentage of banks receiving PCAs are unable to comply with regulatory orders and wind up as failed banks.

The recently released FDIC Quarterly Banking Profile for March 31, 2011, shows a total of 888 banks on the confidential Problem Bank List, up from 884 at year end.  Of the 7,575 FDIC insured institutions at March 31, 2011, 11.7% are on the Problem Bank List.

Listed below is the full list of enforcement actions taken by the FDIC in May 2011.

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

Ocean Bank, Miami, FL; FDIC-11-207b; Issued 5/6/11 – PDF

Citizens Bank & Trust Company, Eastman, GA; FDIC-11-150b; Issued 5/13/11 – PDF

Highland Community Bank, Chicago, IL; FDIC-11-044b; Issued 5/4/11 – PDF

New City Bank, Chicago, IL; FDIC-11-034b; Issued 5/16/11 – PDF

American Bank of the North, Nashwauk, MN; FDIC-11-124b; Issued 5/9/11 – PDF

Stonebridge Bank, Exton, PA; FDIC-11-137b; Issued 5/23/11 – PDF

Public Savings Bank, Huntingdon Valley, PA; FDIC-11-107b; Issued 5/12/11 – PDF

Tennessee Commerce Bank, Franklin, TN; FDIC-11-196b; Issued 5/25/11 – PDF

Patriot Bank, Houston, TX; FDIC-11-158b; Issued 5/13/11 – PDF

Waumandee State Bank, Waumandee, WI; FDIC-11-153b; Issued 5/27/11 – PDF

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

Bank of the West, San Francisco, CA; FDIC-10-596e; against Elizabeth Kolling; Issued 5/26/11 – PDF

Exchange Bank, Santa Rosa, CA; FDIC-11-154e; against Vanessa Outlaw; Issued 5/26/11 – PDF

Flatirons Bank, Boulder, CO; FDIC-11-046e; against Mark H. Yost; Issued 5/9/11 – PDF

Yampa Valley Bank, Steamboat Springs, CO; FDIC-10-366e; against Lucy A. Middleton; Issued 5/26/11 – PDF

Farmers and Merchants Bank, Monticello, FL; FDIC-10-516e; FDIC-10-686k; against Ronald Darrin McGlamry in the amount of $3,500.00; Issued 5/26/11 – PDF

The Cecilian Bank, Cecilian, KY; FDIC-10-299e; against Jackie K. Watson; Issued 5/9/11 – PDF

Community Bank of Mississippi, Forest, MS; FDIC-10-001e; against Penny Jo Lindsey; Issued 5/26/11 – PDF

BankFirst Financial Services, Macon, MS; FDIC-10-580e; against Sherry L. Lofton; Issued 5/13/11 – PDF

Bank of Yazoo City, Yazoo City, MS; FDIC-10-267e; against Charles H. Evans, Jr.; Issued 5/26/11 – PDF

Yadkin Valley Bank and Trust Company, Elkin, NC; FDIC-10-671e; against Doris Stroud Renegar; Issued 5/9/11 – PDF

Westernbank Puerto Rico, Mayaguez, PR; FDIC-11-039e; against Felix Vega-Carrion; Issued 5/9/11 – PDF

Park Cities Bank, Dallas, TX; FDIC-10-399e; against Erin N. Lopez; Issued 5/9/11 – PDF

Sterling Savings Bank, Spokane, WA; FDIC-11-048e; against Shannon M. Kuhlman; Issued 5/13/11 – PDF

WesBanco Bank, Inc., Wheeling, WV; FDIC-11-013e; Order of Prohibition From Further Participation against Daniel L. Rice; Issued 5/13/11 – PDF

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

Farmers and Merchants Bank, Monticello, FL; FDIC-10-516e; FDIC-10-686k; Order of Prohibition From Further Participation and an Order to Pay a Civil Money Penalty against Ronald Darrin McGlamry in the amount of $3,500.00; Issued 5/26/11 – PDF

Midtown Bank & Trust Company, Atlanta, GA; FDIC-11-206k; in the amount of $6,500.00; Issued 5/3/11 – PDF

CentreBank, Veedersburg, IN; FDIC-11-114k; in the amount of $2,695.00; Issued 5/9/11 – PDF

State Bank of Park Rapids, Park Rapids, MN; FDIC-09-149k; Order Amending Order to Pay against Jon P. Smythe in the amount of $10,000.00; Issued 5/26/11 – PDF

Desoto County Bank, Horn Lake, MS; FDIC-10-917k; in the amount of $3,140.00; Issued 5/11/11 – PDF

Citizens Bank & Trust Co., Marks, MS; FDIC-11-099k; in the amount of $6,665.00; Issued 5/31/11 – PDF

The Citizens Bank of Philadelphia, Mississippi, Philadelphia, MS; FDIC-11-155k; in the amount of $15,030.00; Issued 5/31/11 – PDF

Exchange Bank, Gibbon, NE; FDIC-11-200k; in the amount of $5,200.00; Issued 5/24/11 – PDF

First American Bank, Artesia, NM; FDIC-11-160k; in the amount of $22,200.00; Issued 5/31/11 – PDF

Mid Penn Bank, Millersburg, PA; FDIC-11-164k; in the amount of $11,000.00; Issued 5/16/11 – PDF

Bank of Sun Prairie, Sun Prairie, WI; FDIC-10-939k; in the amount of $1,785.00; Issued 5/9/11 – PDF

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

Colorado Capital Bank, Castle Rock, CO; FDIC-11-089PCAS; Issued 5/4/11 – PDF

TERMINATIONS

Orders Terminating Consent Orders and Cease and Desist Orders
Nexity Bank, Birmingham, AL; FDIC-09-011b; Issued 5/3/11 – PDF

Firstier Bank, Louisville, CO; FDIC-09-601b; Issued 5/18/11 – PDF

Cortez Community Bank, Brooksville, FL; FDIC-09-646b; Issued 5/16/11 – PDF

TIB Bank, Naples, FL; FDIC-10-358b; Issued 5/10/11 – PDF

Bartow County Bank, Cartersville, GA; FDIC-09-707b; Issued 5/17/11 – PDF

First Choice Community Bank, Dallas, GA; f/k/a First Choice Community Bank 1874; FDIC-09-346b; Issued 5/31/11 – PDF

Central Pacific Bank, Honolulu, HI; FDIC-09-715b; Issued 5/11/11 – PDF

Community Central Bank, Mount Clemens, MI; FDIC-10-561b; Issued 5/23/11 – PDF

Heritage Banking Group, Carthage, MS; FDIC-10-182b; Issued 4/21/11 – PDF

Slovak Savings Bank, Pittsburgh, PA; FDIC-10-066b; Issued 5/11/11 – PDF

Coffee County Bank, Manchester, TN; FDIC-09-094b; Issued 5/10/11 – PDF

Commercial State Bank of El Campo, El Campo, TX; FDIC-09-262b; Issued 5/16/11 – PDF

Peoples Bank, Elkhorn, WI; FDIC-08-144b; Issued 5/16/11 – PDF

Order Terminating Order to Cease and Desist and Modification of Order to Cease and Desist
Ocean Bank, Miami, FL; FDIC-07-017b; Issued 5/11/11 – PDF

Orders Terminating Supervisory Prompt Corrective Action Directive
Firstier Bank, Louisville, CO; FDIC-10-224PCAS; Issued 5/18/11 – PDF

Heritage Banking Group, Carthage, MS; FDIC-10-907PCAS; Issued 4/21/11 – PDF

NOTICES ISSUED
(Note: A Notice is a proposal enforcement action and is not a final decision or order by the FDIC)

Notices of Charges and of Hearing
EuroBank, Coral Gables, FL; FDIC-10-585b; Issued 5/3/11 – PDF

Marine Bank & Trust Company, Vero Beach, FL; FDIC-10-825b; Issued 5/20/11 – PDF

Amended Notice of Charges for an Order to Cease and Desist; Notice of Assessment of Civil Money Penalties, Findings of Fact and Conclusions of Law; Order to Pay; and Notice of Hearing
Republic Bank & Trust Company, Louisville, KY; FDIC-10-079b; FDIC-10-216k; Issued 5/3/11 – PDF

ADJUDICATED DECISIONS

Chinatrust Bank (U.S.A.), Torrance, CA; FDIC-10-335e; Decision and Order to Prohibit From Further Participation against Arlene Shih; Issued 5/10/11 – PDF

Frontier State Bank, Oklahoma City, OK; FDIC-07-288b; Decision and Order Denying Request for Stay; Issued 5/11/11 – PDF