Valley Bank in Florida Misses Capital Deadline

Valley Bank in Fort Lauderdale, Fla., will get an assist from its parent after facing a capital shortfall.

On Dec. 31, the $102.7 million-asset bank's Tier 1 capital ratio stood at 5.09% and its total risk-based capital ratio was 8.15%, according to a filing with the Federal Deposit Insurance Corp. In June, the FDIC gave the bank until Dec. 31 to achieve a Tier 1 capital ratio of at least 8% and a total risk-based capital ratio of at least 12%.

"We did not hit that number, but we have as a holding company raised capital and we will be down-streaming capital into the bank in the first quarter of 2013," Larry Henson, chief executive of River Valley Bancorp in Davenport, Iowa, Valley Bank's holding company, told American Banker. "To me, it's a very simple, straightforward situation."

The FDIC's order gave Valley 30 days to boost capital or sell itself to another institution. The order also required the bank to charge off loans flagged by regulators, provide a written plan to fortify its position with loans in excess of $250,000 that examiners classified as substandard, and to refrain from extending credit to any borrower whose loan had been charged off, among other things.