Regulators took a series of enforcement actions against banks last month in connection with management oversight, capital adequacy and other matters.
Banks in six states have agreed to take steps to boost capital, revamp policies and detail financial plans, according to a string of orders the Federal Deposit Insurance Corp. released Friday.
The $119 million-asset Village Bank in Saint George, Utah, has agreed to maintain a Tier 1 leverage ratio of at least 9% and to lower its level of classified loans to less than 61% of assets. The bank also agreed to ensure that at least one quarter of its board is composed of directors who have no ties to management as part of a series of steps to tighten its operations and bolster its balance sheet.
Community First Bank in Walhalla, S.C., pledged to maintain Tier 1 capital of at least 8% of total assets and total risk-based capital of at least 10% of risk-weighted assets. The $463 million-asset bank also agreed to hire a consultant to report to the bank on how to attract and retain qualified management, to adopt a system for reviewing and assessing loans, and to notify regulators if assets grow 10% or more in a year.
The $160 million-asset Central Bank in Savannah, Tenn., agreed to achieve a Tier 1 capital ratio of at least 8%, Tier 1 risk-based capital ratio of at least 10% and a total risk-based capital ratio of at least 12%. The bank also agreed to establish a committee of the bank’s board to identify and review problem loans as part of a series of steps to tighten lending and strengthen its portfolio.
Town & Country Bank in Bardstown, Ky., promised to boost Tier 1 capital to at least 9% of assets and total risk-based capital ratio to at least 12%. The $284 million-asset bank also agreed to avoid increasing loans by more than 2% during any consecutive quarter without permission from regulators and to refrain from increasing total loans by more than 8% annually.
The $99 million-asset Mountain Valley Bank in Dunlap, Tenn., has pledged to lift its Tier 1 leverage ratio to at least 8.5%, its Tier 1 risk-based capital ratio to at least 11% and its total risk-based capital ratio to at least 13%. The bank also promised, among other steps, to detail in writing plans to reduce loans in excess of $100,000 that regulators have flagged as substandard, and to address risk from fluctuations in interest rates.
The Bank of Washington in Missouri has consented to maintain a Tier 1 leverage ratio of at least 8% and a total risk-based capital ratio of at least 11%. The $853.1 million-asset bank also has agreed to hire a consultant to report on the bank’s management needs, to replenish its allowance for loan and lease losses and to correct items flagged by regulators as special weaknesses.
U.S. Metro Bank in Garden Grove, Calif., promised to maintain Tier 1 capital of at least 10% and total risk-based capital of at least 12%, to detail in writing plans to repay funds from the Troubled Asset Relief Program, and to review and revise policies that govern lending.
The FDIC also terminated actions against Border State Bank in Greenbush, Mont.; Southern Community Bank and Trust in Winston-Salem, N.C.; Stoneham Savings Bank in Massachusetts; Waterstone Bank in Wauwatosa, Wis.; Farmers & Merchants Bank in Lakeland, Ga.; Paragon Bank in Wells, Minn.; First Midwest Bank in Centerville, S.D.; Evabank in Eva, Ala.; Grabill Bank in Fort Wayne, Ind.; Peoples State Bank in Madison Lake, Minn. and Lone Summit Bank in Lake Lotawana, Mo.