The Federal Reserve Board has issued an enforcement order against First Security Bank of Malta in Montana that gives the bank 30 days to become adequately capitalized or sell itself to another institution.
The prompt corrective action dated June 8 said that the $39 million-asset company was "critically undercapitalized" as of May 23. The order also restricts the bonuses the bank pays its executives and asset growth.
The Federal Reserve also said last week that it entered into written agreements with Calvert Financial of Ashland, Mo., the $114 million-asset Grant Park Bancshares of Grant Park, Ill. and Robertson Holding Company and Unified Shares both of Harrogate, Tenn., that require the companies to serve as a source of strength for their banks. These companies also cannot declare dividend payments or repurchase stock without permission from the Federal Reserve.
Under their respective agreements, the $59 million-asset Calvert, parent of Mainstreet Bank, and Robertson and Unified Shares have to submit a plan to strengthen their credit risk management practices and their boards must strengthen oversight of the banks' management. These companies must also develop plans to maintain sufficient capital levels at their banks.
Robertson and Unified are the holding companies for Commercial Bancgroup and the $801 million-asset Commercial Bank.
The Federal Reserve also entered into a written agreement with Commerzbank AG that requires the German bank to revise its Bank Secrecy Act and anti-money laundering compliance program to ensure it meets the guidelines for bulk cash transactions processed through its New York branch. Commerzbank also must develop a program to identify each transaction of more than $10,000 through the New York branch and file the necessary reports.
