The Federal Reserve Board has given a Premier Bank in Denver 90 days to become adequately capitalized or sell itself.
The $53 million-asset bank became undercapitalized in the fourth quarter of 2011 and remained so at the end of the first quarter, when its leverage ratio was 3.66% and its total risk-based capital ratio was 6.70%. The bank is dealing with problems related to commercial real estate. At March 31, loans at least 90 days past due made up 6.29% of total loans, compared to 4.70% a year earlier, according to Federal Deposit Insurance Corp. data.
The prompt corrective action directive with the Fed requires the bank and its holding company PB Financial Group, to bring in enough equity to give the bank a total risk-based capital ratio of 8% within 90 days. Such directives are typically considered the final public order before regulators move to seize the bank, though regulators have the ability to extend the 90-day timeline.
Alternatively, the Fed order calls for the bank to enter into and close a deal to be acquired by another institution, or find some other way to increase its capital.
The order also prohibits from Premier from soliciting or accepting any new deposits that pay an interest rate that exceeds the prevailing rate within the bank's market.