The Federal Deposit Insurance Corp. has ordered three community banks hobbled by losses on real estate loans to raise fresh capital or merge with other banks.

The banks — two in California and one in Florida - have each submitted proposals recently for replenishing capital, but in Prompt Corrective Action directives issued June 28 and released Friday, the FDIC said that their plans were inadequate. The regulator also raised doubts about whether the banks' existing management was qualified to return the banks "to safe and sound condition."

Of the three, the Royal Palm Bank of Florida in Naples is in the gravest condition. The FDIC said that the $112 million-asset bank is "significantly" undercapitalized and has 60 days from the date of the order to return to "adequately capitalized" status. At March 31, the 10-year-old bank had a total risk-based capital ratio of 5.15% and nearly 15% of its loans were at least 90 days past due.

Royal Palm, a subsidiary of the Mercantile Bancorp Inc. of Quincy, Ill., lost $1.2 million in the first quarter and has lost roughly $55 million since the start of 2008, according to FDIC data. In April, Mercantile's auditors said that the company's recurring losses and continued struggles to find new source of capital raised "substantial doubt" about its ability to survive on its own.

The other banks that received PCA notices — the most serious of all enforcement orders — were the $312 million-asset Citizens Bank of Northern California in Nevada City and the $304 million-asset United American Bank in San Mateo, Calif.

Like Royal Palm, the banks are prohibited from paying dividends and accepting brokered deposits until they return to health. At March 31, both banks were considered to be less-than adequately capitalized with total risk-based capital ratios of just above 7%, and both reported that more than 13% of their loans were at least 90 days past due.

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