Connecticut's Great Country Bank will miss a December regulatory deadline, officials said, marking the second time the bank has failed to raise capital on orders from the Federal Deposit Insurance Corp.
Ansonia-based Great Country Bank is trying to develop a new capital plan to submit to federal regulators, with a new time frame for raising capital.
No new date has been set, but the $350-million-asset bank announced last week that it will be evaluating its staff and operations as part of the process.
This is the second time the bank has had to change its plans.
The original 1992 cease-and-desist order with the FDIC required the bank to reach a 6% capital level by July 25, 1993. Instead, the bank submitted a new plan in July 1993, calling for reaching the goal by December 1994.
Great Country currently has a 5% capital level but bank officials don't expect to reach the goal on time.
The bank has met all other standard requirements of the regulatory order, but the capital level has been hindered by the bank's high level of nonperforming assets.
Great Country lost $18.2 million in 1992, when it had $51.7 million in bad assets, or 13.6% of all assets. Most of the loans were business or real estate credits within Connecticut.
At the end of the last fiscal year on May 31, 1994, the bank still had $23.3 million in bad assets, which is 6.56% of all assets. Great Country reported-losses of $496,000 that year, after spending $8.9 million on foreclosure and other real estate the bank already owns.
"It is not easy to turn a bank around in Connecticut's sluggish economic environment," said Stanley T. Wells, executive vice president of Keefe, Bruyette & Woods in Hartford. "The Connecticut economy has been working against the bank's efforts, lengthening the amount of time necessary to achieve the desired recovery."
Still, Great Country expects the FDIC to accept the new timetable, said Dorran Delay, acting chief financial officer. He said the bank has been in "constant contact" with the FDIC, and added that state and federal regulators even asked the bank to get a new plan after it became clear that it wouldn't comply by December.
Mr. Delay said Great Country officials don't know what the bank will do to raise capital. The institution is already publicly traded on NASDAQ.