Community Pride Bank Corp. in Ham Lake, Minn., is under orders from the Federal Reserve Bank of Minneapolis to use all of its "financial and managerial" resources to ensure that its bank subsidiary remains safe and sound.
In a written agreement dated Aug. 30 and released Tuesday, the $92 million-asset company said it would serve as a strength to its Community Pride Bank and make sure that the bank complies with its May 2010 consent order it signed with its state regulator.
The company is also barred from paying dividends, taking on more debt or raising capital without permission from the Fed and it has agreed to submit written progress reports to the regulator within 30 days of the end of each quarter until the enforcement order is lifted.
Founded in 2000, Community Pride Bank has lost more than $1.9 million over the last four quarters, mostly on soured real estate and commercial and industrial loans. Through the first half of this year the bank charged off 2.42% of its loans, compared to 0.41% in the same six-month period last year, according to Federal Deposit Insurance Corp. data.