SAN FRANCISCO -- The president of the California Bankers Association has been forced to resign from his bank.
Claude B. Hutchison Jr., chairman and chief executive of Civic Bancorp, Oakland, was forced out by his board because of a sharp rise in loan problems.
An association spokeswoman said she did not know whether Mr. Hutchison, 54, would complete his one-year term.
Paul R. Handlery, 71, an outside director since Civic's founding eight years ago, was named the company's interim chairman while a new chief executive is sought.
In an interview, Mr. Handlery said the board had asked Mr. Hutchison to resign after San Francisco Federal Reserve Bank examiners sharply criticized the company's credit procedures. Nonperforming assets equaled 13% of loans plus foreclosed property at March 31.
Mr. Handlery said the rise in loan problems capped a long-standing disagreement between Mr. Hutchison and the board. Civic's outsted chief had stressed rapid growth, building the company to $408 million in assets in eight years, while the board had pressed for higher profits.
Mr. Hutchison could not be reached for comment.
In a statement announcing the departure, Civic said it is acting to improve capital, loan-loss reserves, and credit quality. The company also posted a second-quarter loss of $3.2 million.
